Bond Yields and Rates of Return A 25-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,100. The bond sells for $950. (Assume that the bond has just been issued.) a. What is the bond's yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % b. What is the bond's current yield? Do not round intermediate calculations. Round your answer to two decimal places. % c. What is the bond's capital gain or loss yield? Capital loss yield, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. % d. What is the bond's yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %

Bond Yields and Rates of Return A 25-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 4 years at a call price of $1,100. The bond sells for $950. (Assume that the bond has just been issued.) a. What is the bond's yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % b. What is the bond's current yield? Do not round intermediate calculations. Round your answer to two decimal places. % c. What is the bond's capital gain or loss yield? Capital loss yield, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. % d. What is the bond's yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %

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 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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