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A 10 year bond, that has a 12% semi-annual coupon rate with a par value of $1,000. The bond can be called in 5 years
A 10 year bond, that has a 12% semi-annual coupon rate with a par value of $1,000. The bond can be called in 5 years at a call price of $1050. The current price of the bond is $1100. a. What is the bonds yield to maturity? b. What is the current yield of the bond? c. What is the capital gain or loss on the bond? d. What is the bonds yield to call? e. If the bond is called in 5 years what interest rate it will earn YTM or YTC? Why?
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