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 14P: Current Yield with Semiannual Payments
A bond that matures in 7 years sells for $1,020. The bond has...
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Question
Suppose you have an 8%, 15-year bond traded at $1250. If it is callable in 7 years at $1080, what is the bond’s yield to call? Interest is paid semiannually.
Group of answer choices
A. 3.83%
B. 3.19%
C. 2.68%
D. 2.38%
E. 4.74%
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