Explore BrainMass
Share

Explore BrainMass

    Yield to call, Yield to maturity

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A company has an 6.5% coupon bond outstanding. The bond matures exactly 15 years from today and has a $1,000 face value. Yesterday, October 22, 2009, the company paid its semi-annual interest payment (The bond pays semi-annual interest). The next interest payment will be paid exactly 6 months from today. Today, October 23, 2009, you pay $850.00 for this bond. The bond is callable on or after October 22, 2012 at a call price of 104.125 ($1,041.25).

    A. Compute the yield to call, if the bond is called on October 22, 2012.
    B. Compute the yield to maturity.

    © BrainMass Inc. brainmass.com October 10, 2019, 12:03 am ad1c9bdddf
    https://brainmass.com/business/bond-valuation/yield-call-yield-maturity-277356

    Solution Summary

    The solution explains how to calculate the yield to call and yield to maturity

    $2.19