Question
Three years ago, Jacks Automotive Jacks issued a 20-year callable bond with a $1,000 maturity value and an 8.5 percent coupon rate of interest. Interest
Three years ago, Jacks Automotive Jacks issued a 20-year callable bond with a $1,000 maturity value and an 8.5 percent coupon rate of interest. Interest is paid semiannually. The bond is currently selling for $1,046. * SET TO 4 DECIMAL PLACES*
(a) What is the bonds yield to maturity?
(b) If the bond can be called in four years for a redemption price of $1,089, what is the bonds yield to call?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
6th International Edition
0071229035, 978-0071229036
