Question
Quantitative Problem: Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 8.2% with semiannual payments of $41,
Quantitative Problem: Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 8.2% with semiannual payments of $41, and a par value of $1,000. The price of each bond in the issue is $1,260.00. The bond issue is callable in 5 years at a call price of $1,082.
a.) What is the bond's current yield? Round your answer to two decimal places. Do not round intermediate calculations. %
b.) What is the bond's nominal annual yield to maturity (YTM)? Round your answer to two decimal places. Do not round intermediate calculations. %
c.) What is the bond's nominal annual yield to call (YTC)? Round your answer to two decimal places. Do not round intermediate calculations. %
d.) Assuming interest rates remain at current levels, will the bond issue be called? The firm ____ call the bond. (should/should not)
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