15 POINTS EACH 10. Better Burger Boys has issued a bond with a call feature. It is a 10 year semiannual bond with a coupon rate of 5%. Constant Concrete can call the bond starting at the end of five years. If the yield to call on this bond is 8x and the call requires 388 to pay two years' of additional interest at the call what is the bond price under the assumption that the call will be issued on the first available date? SHOW CORRECT AND COMPLETE TIMELINES. USE GRID FOR SOLVING, ROUND TO THE NEAREST DOLLAR Time lines: n i PV PMT FV 11. What are the advantages/disadvantages of a callable bond to a) the investor and b) to the issuer? 9 12. Assume today is March 14, 2019. The latest information about two semi-annual corporate AAA bonds is shown on your computer screen: TYPE ISSUE DATE PRICE COUPON MATURITY YTM CURRENT FUTURE RATE DATE YIELD VALUE Corporate January 1 6.25 March 14, 4.830 100,000 Bond A 2003 Corporate August 1 100,000 4.25 January 14 4.25 100,000 Bond B 2010 2039 2039 BONDA - Calculate the price and current yield. SHOW CORRECT AND COMPLETE TIMELINES. USE GRID FOR SOLVING, SHOW FOUR DECIMAL PLACES. Time lines: n 1 PV PMT FV 10 13. BOND B - Calculate the YTM SHOW CORRECT AND COMPLETE TIMELINES. USE GRID FOR SOLVING. SHOW FOUR DECIMAL PLACES Time lines: n i PV PMT FV 15 POINTS EACH 10. Better Burger Boys has issued a bond with a call feature. It is a 10 year semiannual bond with a coupon rate of 5%. Constant Concrete can call the bond starting at the end of five years. If the yield to call on this bond is 8x and the call requires 388 to pay two years' of additional interest at the call what is the bond price under the assumption that the call will be issued on the first available date? SHOW CORRECT AND COMPLETE TIMELINES. USE GRID FOR SOLVING, ROUND TO THE NEAREST DOLLAR Time lines: n i PV PMT FV 11. What are the advantages/disadvantages of a callable bond to a) the investor and b) to the issuer? 9 12. Assume today is March 14, 2019. The latest information about two semi-annual corporate AAA bonds is shown on your computer screen: TYPE ISSUE DATE PRICE COUPON MATURITY YTM CURRENT FUTURE RATE DATE YIELD VALUE Corporate January 1 6.25 March 14, 4.830 100,000 Bond A 2003 Corporate August 1 100,000 4.25 January 14 4.25 100,000 Bond B 2010 2039 2039 BONDA - Calculate the price and current yield. SHOW CORRECT AND COMPLETE TIMELINES. USE GRID FOR SOLVING, SHOW FOUR DECIMAL PLACES. Time lines: n 1 PV PMT FV 10 13. BOND B - Calculate the YTM SHOW CORRECT AND COMPLETE TIMELINES. USE GRID FOR SOLVING. SHOW FOUR DECIMAL PLACES Time lines: n i PV PMT FV