-year bond with a 11.8 percent semiannual coupon and a $1,000 face value has a nominal yield to maturity of 9.9 percent. The bond currently sells for $1,161.31. The bond, which may be called after 4 years, has a nominal yield to call of 9.37% percent. What is the bond's call price?

-year bond with a 11.8 percent semiannual coupon and a $1,000 face value has a nominal yield to maturity of 9.9 percent. The bond currently sells for $1,161.31. The bond, which may be called after 4 years, has a nominal yield to call of 9.37% percent. What is the bond's call price?

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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Question

A 19-year bond with a 11.8 percent semiannual coupon and a
$1,000 face
value has a nominal yield to maturity of 9.9 percent. The bond
currently sells for
$1,161.31. The bond, which may be called after 4 years, has a
nominal yield to
call of 9.37% percent. What is the bond's call price?
O $1,118
O $1,128
O $1,158
O $1,148
O $1,138

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