A corporate bond s yield to maturity

    • [DOC File]CHAPTER 7

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      14. A 20-year $1,000 par value bond has a 7% annual coupon. The bond is callable after the 10th year for a call premium of $1,025. If the bond is trading with a yield to call of 6.25%, the bond’s yield to maturity is what? Solution: The current price of the bond is computed using the yield to call as follows:

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    • [DOCX File]Leeds School of Business | University of Colorado Boulder

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      What is the bond’s current yield? a. 12.20% b. 13.05% c. 13.75% d. 14.00% e. 14.50%. 5. Acme Products has a bond issue outstanding with 8 years remaining to maturity, a coupon rate of 10 percent with interest paid annually, and a par value of $1,000. If the current market price of the bond issue is $814.45, what is the yield to maturity, rd?

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    • [DOC File]Sample midterm

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      [LO 1] At the beginning of his current tax year, Eric bought a corporate bond with a maturity value of $50,000 from the secondary market for $45,000. The bond has a stated annual interest rate of 5 percent payable on June 30 and December 31, and it matures in five years on December 31.

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    • [DOC File]Bonds, Study Guide

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      A 10-year corporate bond maturing on January 1, 2013, with the same liquidity and default risk premiums as the 5-year corporate bond has a yield to maturity of 8.2 percent. The annual real risk-free rate of interest, k*, is expected to remain constant at 2 percent. The maturity risk premium equals 0.1%(t - 1), where t = the bond’s maturity in ...

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    • Yield to Maturity (YTM) Definition

      A bond's cash flows consist of (1) coupon payments and (2) return of principal (par or maturity value). Principal is usually returned at the end of a bond's term, known as its maturity date.A bond's yield to maturity is the discount rate that can be used to make the present value of all of the bond's cash flows equal to its market price.

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    • [DOC File]Quantitative Problems Chapter 10

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      A zero-coupon bond with 20 years until maturity. 7. U.S. Treasury bond yields do not contain a: coupon interest payment. nominal interest rate. yield to maturity. default premium. 8. What is the current yield of a bond with a 6% coupon, four years until maturity, and …

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