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A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The
A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has just been issued.)
Basic Input Data: | ||
Years to maturity: | 20 | |
Periods per year: | 2 | |
Periods to maturity: | ||
Coupon rate: | 8% | |
Par value: | $1,000 | |
Periodic payment: | ||
Current price | $1,100 | |
Call price: | $1,040 | |
Years till callable: | 5 | |
Periods till callable: |
a.) What is the bond's yield to maturity?
b.) What is the bond's current yield?
c.) What is the bond's capital gain or loss yield?
Please show your work.
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