Suppose a 19-year, 11% coupon bond selling for $1,233.64 is first callable in 6 years at $1,055. Coupons are paid twice a year and par value is $1000. What is the annual yield to first call date? OA. 6.1% B. 7.1% OC. 6.5% OD. 5.7%

Suppose a 19-year, 11% coupon bond selling for $1,233.64 is first callable in 6 years at $1,055. Coupons are paid twice a year and par value is $1000. What is the annual yield to first call date? OA. 6.1% B. 7.1% OC. 6.5% OD. 5.7%

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 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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Question

Suppose a 19-year, 11% coupon bond selling for $1,233.64 is first callable in 6 years at $1,055. Coupons are paid twice a year and par
value is $1000. What is the annual yield to first call date?
A. 6.1%
B. 7.1%
C. 6.5%
D. 5.7%

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