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Problem 12-06 Four years ago, your firm issued $1,000 par, 25-year bonds, with a 6% coupon rate and a 9% call premium. Assume semiannual compounding.
Problem 12-06 Four years ago, your firm issued $1,000 par, 25-year bonds, with a 6% coupon rate and a 9% call premium. Assume semiannual compounding. a. If these bonds are now called, what is the actual yield to call for the investors who originally purchased them at par? Do not round intermediate calculations. Round your answer to two decimal places. % annually b. If the current interest rate on the bond is 4% and the bonds were not callable, at what price would each bond sell? Do not round intermediate calculations. Round your answer to the nearest cent. $
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