Question
Bond returns Last year, Joan purchased a $1,000 face value corporate bond with an 12% annual coupon rate and a 25-year maturity. At the time
Bond returns
Last year, Joan purchased a $1,000 face value corporate bond with an 12% annual coupon rate and a 25-year maturity. At the time of the purchase, it had an expected yield to maturity of 11.63%. If Joan sold the bond today for $994.9, what rate of return would she have earned for the past year? Round your answer to two decimal places.
Yield to maturity and yield to call
Kaufman Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 11% annual coupon payment, and their current price is $1,180. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).
What is the yield to maturity? Round your answer to two decimal places.
What is the yield to call if they are called in 5 years? Round your answer to two decimal places.
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