Question
A). Tropical Resort, Inc.'s bonds currently sell for $1,350 and have a par value of $1,000.They pay a 12% coupon rate with interest paid semi-annually,
A). Tropical Resort, Inc.'s bonds currently sell for $1,350 and have a par value of $1,000.They pay a 12% coupon rate with interest paid semi-annually, and have a 15-year maturity, but they can be called in 3 years at $1,125.What is their yield to call (YTC)?Enter your answer rounded to two decimal places.Do not enter % in the answer box.For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.
B). Big Manufacturer Corporation's bonds have a 10-year maturity, a 5.75% coupon rate with interest paid semiannually, and a par value of $1,000.The nominal required rate of return on these bonds is 6.75%.What is the bond's intrinsic value?Enter your answer rounded to two decimal places.Do not enter $ or comma in the answer box.For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
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