Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have a 12% 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? 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.
Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have a 12% 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? 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.
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 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have a 12% 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?
- 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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