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A(n) 9.5%, 25-year bond has a par value of $1,000 and a call price of $1,025. (The bond's first call date is in 5 years.)
A(n) 9.5%, 25-year bond has a par value of $1,000 and a call price of $1,025. (The bond's first call date is in 5 years.) Coupon payments are made semiannually (so use semiannual compounding where appropriate). a. Find the current yield, YTM, and YTC on this issue, given that it is currently being priced in the market at $1,150. Which of these 3 yields is the highest? Which is the lowest? Which yield would you use to value this bond? Explain. b. Repeat the 3 calculations above, given that the bond is being priced at $800. Now which yield is the highest? Which is the lowest? Which yield would you use to value this bond? Explain. .... a. If the bond is priced at $1,150, the current yield is%. (Round to two decimal places.)
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