Keenan Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 6.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,045. What is the bond's nominal yield to call? The answer is 5.59% I want to know the formula to calculate by the financial calculator. Thanks

Keenan Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 6.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,045. What is the bond's nominal yield to call? The answer is 5.59% I want to know the formula to calculate by the financial calculator. Thanks

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

See similar textbooks

Similar questions

As a bond analyst at Morgan Stanley Investment Banking, you are performing an analysis on bond yield. You have the following data for a bond issued by Intel Corp. The bond has 7% coupon and 20-year maturity. The bond sells for $1,150 and is callable in 10 years at a call price of $1,250. The bond has a face value of $1000 and makes semiannual coupon payments.a. What is the annual Yield to Call? (sample answer: 12.45%)b. What is the annual Yield to Maturity? (sample answer: 12.45%) Give typing answer with explanation and conclusion
Arco Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 par value. The bond has a 6.9% yield to maturity, but it can be called in 6 years at a price of $1,045. What is the bond's yield to call? Hint: Calculate the bond's price based on the YTM, and then use that price to find the YTC. Your answer should be between 4.08 and 10.64, rounded to 2 decimal places, with no special characters.
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of 1000, and a coupon rate of 7.8% (annual payments). The yield to maturity on this bond when it was issued was 6.2%. Assuming the yield to maturity remains constant, what is the price of the bond immediately after it makes its first coupon payment? After the first coupon payment, the price of the bond will be $_____ (Round to the nearest cent.)
What is the price of the seasoned Treasury Bond that has a 5 percent coupon rate paid semi-annually and has 9 years till maturity and a 1000 dollar face value? Assume that the current market interest rates for the 9-year Treasury bonds is currently 8 percent with semi-annual compounding. Show your work (show the correct equation(s) with the correct numbers in the equation). Provide the correct answer.
problems should be solved by using a financial calculator or MS excel spreadsheet. Accordingly, you must show the values of all relevant time valu of money variables Columbus Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 30 years. Their nominal yield to maturity is 10%, they pay interest quarterlly, and they sell at a price of $980. What is the bond's annual coupon interest rate?
You are a fixed income analyst with an active investment in two bonds. X and Y. Bond X has a coupon rate of 9% and Bond Y has a 10% annual coupon. Both bonds have 5 years to maturity. The yield to maturity for both bonds is now 10%. If the required return rises by 14%, by what percentage will the price of the bond X change? Please provide complete details of the calculations (formula/steps) of the above question
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in mumerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your…
Bond valuation related problems should be solved by using a financial calculator or MS excel spreadsheet. Accordingly, you must show the values of all relevant time valu of money variables Columbus Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 30 years. Their nominal yield to maturity is 10%, they pay interest quarterlly, and they sell at a price of $980. What is the bond's annual coupon interest rate?
What is the semi-annual coupon bond’s nominal yield to maturity (YTM), if the years to maturity is 15 years, and sells for 105% with coupons rate of 10%? Assume the par value of the bond is $1,000. Using a financial calculator
Maroon Two Inc. has just issued 10,000 coupon bonds with face value of $1,000, coupon rate of 9%, semi-annual coupon payment, and maturity of 10 years. What is price on each coupon bond if the current yield on similar bonds in the market is 8.5%? Show me all the calculation steps and formulas if necessary
The closing price of a U.S. Treasury bond with a face value of $1400 is quoted as 105.45 points, for a current yield of 3.7%. If you buy this bond, how much annual interest will you receive? Make sure your final answer is in a statement form. Show all your math formula/setun math work, and your answer in the space below.
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7.0% (annual payme was 6.0%. Assuming the yield to maturity remains constant, what is the price of the bond immediately after it makes its first coupon payment? After the first coupon payment, the price of the bond will be $ (Round to the nearest cent.) KITS