Yield to Maturity and the Yield to Call
Not what you're looking for?
Please help with the given problem:
It is now January 1, 2009, and you are considering the purchase of an outstanding RDC bond that was issued on January 1, 2007. The bond has a 9.5% annual coupon and a 30 year original maturity (it matures in December 31, 2036). There is a 5 year call protection (until December 31, 20011), after which time the bond can be called at 109 (that is, at 109 percent of par, or $1,090). Interest rates have declined since the bond was issued, and the bond is now selling at 116.575% percent of par, or $1,165.75. You want to determine both the yield to maturity and the yield to call for this bond.
Thank you!
Purchase this Solution
Solution Summary
This solution explains how to calculate the yield to maturity and the yield to call of a bond. The solution is provided in Excel format for the student's convenience.
Solution Preview
** Please see the attached file for the an Excel formatted copy of the solution **
The YTM is the discounting rate that will make the present value of interest and principal equal to the price today.
In the same way YTC is ...
Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Operations Management
This quiz tests a student's knowledge about Operations Management
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.