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QUESTION 14 The Spruce Inc. is planning to issue two bonds. Both Bond Bill and Bond Ted have 10.2 percent coupon rates, make semiannual payments,
QUESTION 14 The Spruce Inc. is planning to issue two bonds. Both Bond Bill and Bond Ted have 10.2 percent coupon rates, make semiannual payments, and have a maturity of 30 years. The difference between these two bonds is that Bond Bill is a bond without callable terms, whereas Bond Ted is a callable bond with a call protection period of 10 years and a call premium of $100. On the first day when these two bonds are traded on the market, the quoted price of Bond Bill is 98.8 and the quoted price of Bond Ted is 92.5. Requirement 1: What is the yield to maturity for Bond Bill? (Do not round intermediate results. Round your answer to otify s question to 2 decimal places.) YTM Bond Bill % Requirement 2: What is the yield to call for Bond Ted? (Do not round intermediate results. Round your answer to this question to 2 decimal places. ) YTC Bond Ted %
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