Question
Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 18-year
Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 18-year to maturity, carry a 11.60 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that these bonds would sell for $1,312 each. What is the yield to maturity for these bonds?
What is the yield to call of a 20-year to maturity bond that pays a coupon rate of 10.28 percent per year, has a $1,000 par value, and is currently priced at $1,344? The bond can be called back in 6 years at a call price $1,093. Assume annual coupon payments.
Round the answer to two decimal places in percentage form.
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