XZYY, Inc. currently has an issue of bonds outstanding that will mature in 34 years. The bonds have a face value of $1,000 and a stated annual coupon rate of 18% with annual coupon payments. The bond is currently selling for $1114. The bonds may be called in 4 years for 121% of par value. What is your expected quoted annual rate of return if you buy the bonds and the company calls them when possible? 17.81% 16.15% 19.58% 14.79% 12.11%

XZYY, Inc. currently has an issue of bonds outstanding that will mature in 34 years. The bonds have a face value of $1,000 and a stated annual coupon rate of 18% with annual coupon payments. The bond is currently selling for $1114. The bonds may be called in 4 years for 121% of par value. What is your expected quoted annual rate of return if you buy the bonds and the company calls them when possible? 17.81% 16.15% 19.58% 14.79% 12.11%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 16P

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