You are a bond trader. You are considering buying a semiannual bond with a coupon rate of 6.5% that matures in 11 years. The bond price is now tradingfor $942.18. Par value is $1,000. The bond can be called in 7 years for $1,052. What is the yield to call (YTC)? (Please write in annual yield to call inpercentage form with 2 decimal places i.e. 12.34. Do not include a percent sign with your answer.)Numeric Response

Yield to call is the annual return that a bond holder would receive if the bond is called at the…

Answered: What is the yield to call (YTC)? (Plea

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What is the yield to call (YTC)? (Plea

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...

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

Question

You are a bond trader. You are considering buying a semiannual bond with a coupon rate of 6.5% that matures in 11 years. The bond price is now trading
for $942.18. Par value is $1,000. The bond can be called in 7 years for $1,052. What is the yield to call (YTC)? (Please write in annual yield to call in
percentage form with 2 decimal places i.e. 12.34. Do not include a percent sign with your answer.)
Numeric Response

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