last year Fairmate Inc. issued a 10 year 14% semi annual coupon bond at its par value of 1000. Currently the bond can be called in eight years at a price of 1070 and it sells for 1350. What is the bond nominal yield to call
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last year Fairmate Inc. issued a 10 year 14% semi annual coupon bond at its par value of 1000. Currently the bond can be called in eight years at a price of 1070 and it sells for 1350. What is the bond nominal yield to call
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- Current Yield for Annual Payments Heath Food Corporations bonds have 7 years remaining to maturity. The bonds have a face value of 1,000 and a yield to maturity of 8%. They pay interest annually and have a 9% coupon rate. What is their current yield?Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?
- Last year Carson Industries issued a 10-year, 13% semiannual coupon bondat its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065and it sells for $1,200.a. What are the bond’s nominal yield to maturity and its nominal yield to call? Would aninvestor be more likely to earn the YTM or the YTC?b. What is the current yield? Is this yield affected by whether the bond is likely to be called?(Hint: Refer to footnote 6 for the definition of the current yield and to Table 7.1.)c. What is the expected capital gains (or loss) yield for the coming year? Is this yielddependent on whether the bond is expected to be called? Explain your answer.Carries Clothes, Inc. has a five -year bond outstanding that pays $60 annually. The face value of each bond is $1,000, and the bond sells for $890. Use semi- annual interest payments if it applies. What is the bond’s coupon rate? What is the current yield? What is the yield to maturity?A bond with 10 years to maturity has a face value of $1,000. The bond can be called in four years for $1050. The bond pays a 6 percent semiannual coupon and the bond has a 1.1 percent nominal yield to maturity. What is the price of the bond today assuming that it will be called?
- Dausin Design offers bonds with a coupon rate of 9 percent per year, paid semiannually. The yield to maturity is 3.5 percent and the maturity date is 10 years from today. What is the market price of this bond if the face value is $1,000?CCC Co issues a bond today that will pay a coupon of 8%, twice a year. The yield to maturity for this company is 4.8%. Calculate the price of this bond if it matures in (a) 6 years, (b) 12, and (c) 22.5 years, knowing that its face value is GBP 10,000. What happens to the price of this bond if on the same day of the issue, the yield to maturity changes to 4.6%? What if the YTM changeis in the opposite direction, to 5%? Please don't use excel shortcut formulasLast year Carson Industries issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065 and it sells for $1,270. What is the current yield? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Round your answer to two decimal places. % What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calculation, if required. Negative value should be indicated by a minus sign. Round your answer to two decimal places. %
- Brandt Corporation's 30-year bond has 10 years left until maturity. The 8% coupon bond has a par value of $1000 and pays interest semiannually. The bond currently sells for $1089.84. What is the bond's current yield? What is the bond's yield to maturity?A 15-year, 11% coupon bond with semi-annual payment and a par value of $1,000 may be called in 5 years at a call price of $1,070. The bond was just issued and sells for $1,200. What is the bond's capital gains yield?The bonds of CEPS Group sells for OMR 1,119.35. The yield to maturity is 10 percent and the maturity date is 11 years from today. What is the annual coupon rate of this bond if the face value is $1,000?
