Question
Company ABC has issued a bond with a face value of $1000, a coupon rate of 5% per annum, and a maturity period of 5
Company ABC has issued a bond with a face value of $1000, a coupon rate of 5% per annum, and a maturity period of 5 years. If the bond is currently trading at $950, what is the yield to maturity of the bond? Also, if the company decides to call the bond in 3 years' time at a call premium of 2% of the face value, what is the yield to call of the bond?
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Corporate Financial Management
Authors: Glen Arnold
5th edition
978-1292178066, 129217806X, 273758837, 978-0273758839
