Question
The semi-annual bonds of Golden Eagle Airlines currently sell for $1,160 with 14 years remaining to maturity. The bonds have a par value of $1,000
The semi-annual bonds of Golden Eagle Airlines currently sell for $1,160 with 14 years remaining to maturity. The bonds have a par value of $1,000 and pay a coupon rate of 6%. The call provision states that the bond can be called by the issuer in 4 years at $1,060.
What is the yield to maturity (YTM)?
What is the yield to call (YTC)?
Would Golden Eagle Airlines call the bond, why? How does that relate to an individual re-negotiating a lower rate on their mortgage?
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Essays In Public Finance Theory And Practice Of Decentralization Essays In Public Finance
Authors: Tikiri Herath
1st Edition
3659130532, 9783659130533
