Question
A 4.50 percent coupon municipal bond has 11 years left to maturity and has a price quote of 97.50. The bond can be called in
A 4.50 percent coupon municipal bond has 11 years left to maturity and has a price quote of 97.50. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the bonds current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Compute the yield to maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Compute the taxable equivalent yield (for an investor in the 36 percent marginal tax bracket). (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Compute the yield to call. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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