Lourdes Corporation's 13% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 25 years, are callable 5 years from today at $1,025. They sell at a price of $1,281.79, and the yield curve is flat. Assume that interest rates are expected to remain at their current level. What is the best estimate of these bonds' remaining life? Round your answer to two decimal places.
Lourdes Corporation's 13% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 25 years, are callable 5 years from today at $1,025. They sell at a price of $1,281.79, and the yield curve is flat. Assume that interest rates are expected to remain at their current level. What is the best estimate of these bonds' remaining life? Round your answer to two decimal places.
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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Lourdes Corporation's 13% coupon rate, semiannual payment, $1,000 par
- What is the best estimate of these bonds' remaining life? Round your answer to two decimal places.
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