Purchase Solution

Calculate YTC and YTM for a 20 year coupon bond

Not what you're looking for?

Ask Custom Question

What are the YTC and YTM for a 20-year, 8% Semiannual coupon bond selling for $1,225, which can be called in 5 years for $1,085? What is the effective YTC? Would you expect to earn YTM or YTC on this bond and why? Also, show the formula and entries on a financial calculator.

Purchase this Solution
Solution Summary

In a series of calculations, the response shows the formulas and the answers.

Solution Preview

In a calculator:
Number of periods = 20*2 =40
Future value = 1000
semiannual payment = 1000*8% / 2 = 40
present value ...

Purchase this Solution
Free BrainMass Quizzes
Motivation

This tests some key elements of major motivation theories.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

View More Free Quizzes
Related BrainMass Solutions

  • Financial Management: keystrokes on a TI BA II to solve a YTM, YTC bond problem

    Assuming that the bond is being sold at a discount, would the YTM or YTC be more relevant? Why? 1. Calculate the YTM in Year 2005 for the bond. Calculate the YTC. Assuming the coupon is paid annually.

  • Calculating YTM and YTC

    calculate yield to maturity (YTM) and yield to call (YTC).

  • Bond Valuation

    200623 Bond Valuation A $1,000 par value bond sells for $1,216. It matures in 20 years, has a 14 percent coupon, pays interest semiannually, and can be called in 5 years at a price of $1,100. What is the bond's YTM and YTC?

  • Dividend yield, YTM, YTC

    A $1,000 par value bond sells for $1,216.  It matures in 20 years, has a 14 percent coupon, pays interest semiannually, and can be called in 5 years at a price of $1,100.  What is the bond's YTM and YTC?   

  • Bond reinvestment of coupons; Yield to call; IRR for a 20 ye

    b- What is the yield-to-call (YTC) for a bond with three years remaining to first call, a remaining maturity of 17 years, coupon of 10% (paid semiannually), par value of $1,000, 110% call premium, and selling for $1,008.50 c- Assume a 20-year bond,

  • Yield to maturity (YTM) and Yield to Call (YTC)

    272310 Calculate Yield to maturity (YTM) and Yield to Call (YTC) B7. (Yield to maturity) Coca-Cola has a zero-coupon bond that will pay $1,000 at maturity in five years. Today the bond is selling for $790.09. What is the YTM? B8.

  • Luther Industries

    270259 YTM and YTC of a Bond 1. Luther Industries has just issued a callable (at 102) ten-year, 8% coupon bond with semi-annual coupon payments. The bond can be called at 102 in three years or anytime thereafter on a coupon payment date.

  • Calculating YTM and YTC

    function to calculate YTC YTC=2.94% Solution describes the steps to calculate yield to maturity(YTM) and yield to call (YTC) for a callable coupon paying bond.

  • Bonds:YTM, YTC, PV, value, current yield, capital gain yield

    Bond YTC 1 A coupon bond has annual payments based on a face value of $1,000 and a coupon rate of 9.45%. The bond matures in 29 years and is selling for $1,058.25.

View More Related Solutions