58 Part3 59 The client is also interested in corporate bonds and asked you to evaluate a 20-year callable bond with a 10.5% annual coupon 50 rate, with semiannual payments and a par value of $1,000 may be called in 10 years at a call price of $1,105. The bond sells for 51 $995. (Assume that the bond has just been issued.) 52 63 Basic Input Data: 64 Years to maturity: 20 65 Periods per year 66 Periods to maturity: 67 Coupon rate: 68 Par value: 69 Periodic payment 70 Current price 71 Call price: 172 Years till callable: 173 Periods till callable: 174 175 What is the bond's yield to maturity? 176 177 Annualized Nominal YTM 178 179 What is the bond's current yield? 180 181 Current yield 182 183 What is the bond's capital gain or loss yield? 184 185 Cap. Gain/loss yield [ 186 187 What is the bond's yield to call? 188 189 Annualized Nominal YTC- 190 191 192 Discussion: Under what condition(s) is the bond issuer likely to call the bond? Explain why the issuer would call the bond. 193 194 195 196 197 2 10.5% $1,000 $995 $1,105 10 20 points possible Hint This is a nominal rate, not the effective rate. Nominal rates are generally quoted. Hint Cell formulas should refer to the Basic Input Data Hint: Cell formulas should refer to the Basic Input Data Hint: Cell formulas should refer to previous calculations This is a nominal rate, not the effective rate. Nominal rates are generally quoted. +