Question
If interest rates in the financial markets increase after a bond is issued, what will happen to the bonds price and its yield to maturity?
- If interest rates in the financial markets increase after a bond is issued, what will happen to the bonds price and its yield to maturity?
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Channel Marker Ships (CMS) has a 14-year callable bond with a $1,000 face value and a call value, or redemption price, equal to $1,070. The coupon rate of interest is 7 percent, which is paid semiannually. Currently, the bond is selling for $886. (a) What is the bonds yield to maturity (YTM)? (b) If the bond can be called in six years, what is its yield to call (YTC)?
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The Handbook Of Mergers And Acquisitions
Authors: David Faulkner, Satu Teerikangas, Richard J. Joseph
1st Edition
0199601461, 978-0199601462
