Swing Co. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,130.35. However, Swing Co. may call the bonds in eight years at a call price of $1,060. What are the YTM and the yield to call (YTC) on Swing Co.’s bonds?
Solved
Show answers
More tips
- S Style and Beauty How to Make Your Lips Fuller? Ideas and Tips for Beautiful Lips...
- S Style and Beauty How are artificial nails removed?...
- F Family and Home How to Sew Curtain Tapes: Best Tips from Professionals...
- H Horoscopes, Magic, Divination How to Cast a Love Spell on a Guy? Guide for Guys...
- F Family and Home How to Properly Use a Water Level?...
- L Legal consultation What Documents Are Required for a Russian Passport?...
- H Health and Medicine How to Treat Styes: Causes, Symptoms, and Home Remedies...
- F Family and Home Protect Your Home or Apartment from Pesky Ants...
- T Travel and tourism Lost in the Catacombs: What to Do?...
- C Computers and Internet Make Easy Accessible Screenshots on iPad in Just a Few Minutes...
Answers on questions: Business
- B Business N a typical year, Chandler s parents spend 35% of its income on housing, 20% on travel-related expenses, 10% on utilities, 25% on health care, and 5% on miscellaneous items....
- B Business Self-driving cars are no longer science fiction. These vehicles are programmed to use lasers, sensors, software, and maps to drive themselves. A handful of states have passed...
- B Business The average starting salary for graduates at a university is $33,000 with a standard deviation of $2,000. If a histogram of the data shows that it takes on a mound shape, the...
- B Business Which three of the following are key elements of an incident report? name of person involved statement from expert experiments performed on evidence conclusion description of...
- B Business Assume that the formula for the coupon rates of a floater and an inverse floater are: floater coupon rate: reference rate + 1.25% inverse floater coupon rate: 10.50% - reference...
- B Business Order the schools of thought in the behavioral viewpoint from earliest to most recent. multiple choice a. early behaviorism, b. human relations movement, c. scientific management...
- B Business On august 31, year 1, the general ledger of a company shows a balance for cash of $7,844. cash receipts yet to be deposited into the checking account total $3,238, and checks...
- B Business Requirement 2. the facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $ 3 comma 100$3,100 to profit....
- B Business Suppose a ceo has a compensation package which includes a bonus contingent on the firm s stock price. bonus is paid only if the stock price increases above $150 by the time...
- B Business The accounting records of wall s china shop reflected the following balances as of january 1, year 2: cash $ 80,100 beginning inventory 33,000 (220 units @ $150) common stock...
Ответ:
YTM = 7.77%
YTC = 7.62%
Explanation:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {90 + [(1,000 - 1,130.35)/18]} / [(1,000 + 1,130.35)/2]
YTM = 82.758333 / 1,065.175 = 0.07769 = 7.77%
YTC = {coupon + [(call value - market value)/n]} / [(call value + market value)/2]
YTC = {90 + [(1,060 - 1,130.35)/8]} / [(1,000 + 1,130.35)/2]
YTC = 81.20625 / 1,065.175 = 0.07623 = 7.62%
Ответ: