Call premium of the bond

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Problem 1:

Consider a bond with a 5.2 percent coupon rate and a yield to call of 6.1 percent. The bond currently sells for $1,086. If the bond is callable in 5 years, what is the call premium of the bond? (Do not round intermediate calculations. Round your final answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Problem 2:

A convertible bond has a 5 percent coupon, paid semiannually, and will mature in 15 years. If the bond were not convertible, it would be priced to yield 4 percent. The conversion ratio on the bond is 15 and the stock is currently selling for $60 per share. What is the minimum value of this bond? (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Problem 3:

A 5,000 par value municipal bond with a coupon rate of 3.2 percent has a yield to maturity of 4.2 percent. If the bond has 15 years to maturity, what is the price of the bond? (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Problem 4:

A 5,000 par value municipal bond with a coupon rate of 2.71 percent sells for $3,428 and has ten years until maturity. What is the yield to maturity of the bond? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Problem 5:

A municipal bond has 6 years until maturity and sells for $5,337.15. The coupon rate on the bond is 8.42 percent and the bond is callable in 4 years. What is the yield to call if the call price is 110 percent of par? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Reference no: EM13751226

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