Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 11% annual coupon payment, and their current price is $1,175. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. %What is the yield to call if they are called in 5 years? Do not round intermediate calculations. Round your answer to two decimal places. %

MS-Excel --> Formulas --> Financials --> Rate Therefore, the yield to maturity is 8.35%.

Answered: Kempton Enterprises has bonds…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 22P: Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of...

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Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 11% annual coupon payment, and their current price is $1,175. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).

What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.
%
What is the yield to call if they are called in 5 years? Do not round intermediate calculations. Round your answer to two decimal places.
%

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