Determine the rate of return that the company will make

Reference no: EM13317842

Five years ago, GSI, an oil services company headquartered in Texas, issued $10 million worth of 12% 30-year bond with the dividend payable quarterly. The bonds have a call date of this year if GSI decides to take advantage of it. If the company buys the bonds back now for $11 million, determine the rate of return that the company will make (a) per quarter and (b) per year (nominal).

Reference no: EM13317842

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