3. Assuming Smile Corp., issues a call notice to redeem the debenture bond issuances. This bond has still 4 years life before its maturity at a call price of 110-1/4. Hapi has still six (6) debenture bonds, and is now selling at 106-3/4. If Hapi exercise the call option: a. How much is the total amount she will be receiving? b. Compute for the yield to call. c. What is the capital gains yield?
3. Assuming Smile Corp., issues a call notice to redeem the debenture bond issuances. This bond has still 4 years life before its maturity at a call price of 110-1/4. Hapi has still six (6) debenture bonds, and is now selling at 106-3/4. If Hapi exercise the call option: a. How much is the total amount she will be receiving? b. Compute for the yield to call. c. What is the capital gains yield?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 9P
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