Problem 7-11 Bond yields

One year ago Clark Company issued a 10-year, 15% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,075, and it now sells for $1,180.

What is the bond's nominal yield to maturity? Round your answer to two decimal places. % What is the bond's nominal yield to call? Round your answer to two decimal places. %

What is the current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. %

What is the expected capital gains (or loss) yield for the coming year? Round your answer to two decimal places. %

Problem 7-12 Yield to call

It is now January 1, 2014, and you are considering the purchase of an outstanding bond that was issued on January 1, 2012. It has a 8.5% annual coupon and had a 15-year original maturity. (It matures on December 31, 2026.) There is 5 years of call protection (until December 31, 2016), after which time it can be called at 109-that is, at 109% of par, or $1,090. Interest rates have declined since it was issued; and it is now selling at 111.545% of par, or $1,115.45.

What is the yield to maturity? Round your answer to two decimal places. % What is the yield to call? Round your answer to two decimal places. %