Question
You hold a 20 year bond callable in 5 years at a call price of 1,100; the bond has annual payments of 10% of its
You hold a 20 year bond callable in 5 years at a call price of 1,100; the bond has annual payments of 10% of its par value of $1,000. Current bond price is $948.20.
a. Find the yield to maturity.
b.Find the yield to call.
c.Do you think the issuer is likely to call the bond in 5 years? Why or why not?
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Management Science The Art Of Modeling With Spreadsheets
Authors: Stephen G. Powell, Kenneth R. Baker
3rd Edition
0470530677, 978-0470530672
