What is the yield to call of bond

Assignment Help Financial Management
Reference no: EM131878294

1. Review how time to maturity and the coupon rate affect interest rate risk (200 words and no Plagiarism)

2. A 5.45 percent coupon bond with 16 years left to maturity can be called in six years. The call premium is one year of coupon payments. It is offered for sale at $1,085.90. What is the yield to call of the bond? (Assume interest payments are semiannual.) (Round your answer to 2 decimal places.)

Reference no: EM131878294

Questions Cloud

Stock consistent with present value pricing : Derive the current price of the stock (i.e. P0) consistent with present value pricing.
Problem algebraically as linear programming model : Formulate the problem algebraically as linear programming model.
Compute the bond current yield and yield to call : Compute the bond’s current yield. Compute the yield to call. Compute the yield to maturity.
The total return of the bond in percent : What would be the total return of the bond in percent? What would be the total return of the bond in dollars?
What is the yield to call of bond : It is offered for sale at $1,085.90. What is the yield to call of the bond?
What is the total cost of this inventory decision : What is the economic order quantity? What is the total cost of this inventory decision?
Differential growth-what is the projected dividend : What is the projected dividend for the coming year?
An investor sells european call option : An investor sells a European call option with strike price of and maturity and buys a put with same strike price and maturity. Describe the investor’s position.
What yield to maturity is bond offering : A 6.25 percent coupon bond with 19 years left to maturity is offered for sale at $1,095.25. What yield to maturity is the bond offering?

Reviews

Write a Review

Financial Management Questions & Answers

  Issue financial reports of low quality

Which of the following is least likely to be a motivation for managers to issue financial reports of low quality?

  What is the standard deviation of this stock for the past

A stock had returns of 6 percent, –7 percent, 2 percent, and 10 percent over the past 4 years. What is the standard deviation of this stock for the past four years?

  Opportunity cost of capital for this type of equipment

One year ago, your company purchased a machine used in manufacturing for $120,000. You have learned that a new machine is available that offers many advantages; you can purchase it for $155,000 today. Your company tax rate is 45%, and the opportunity..

  Analyze some of the political and currency risks

Analyze some of the political and currency risks of Mexico. what are the three for four specific factors that you would take into consideration?

  Mechanical engineering has invented money machine

Your buddy in mechanical engineering has invented a money machine. What is your advice if the machine takes one year to? build?

  Net income in dividends and share repurchases

Dixie Mart has 75,000 shares of stock outstanding. The firm also expects to pay out 40 percent of its net income in dividends and share repurchases.

  Marginal tax rate is the tax rate on marginal taxable income

In a progressvie tax system, average tax rate and marginal tax rate are usually different. The marginal tax rate is the tax rate on marginal taxable income.

  Equity investments-common stock that pays annual dividend

Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $1.80 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 15.60 per..

  Operating costs are incremental and represent cash flows

Araucana Fabricating manufactures springs and related components for a variety of industrial and consumer end products. AF is evaluating a new business opportunity. Assume all these operating costs are incremental and represent cash flows with one ex..

  What should be the annual stated rate

What should be the annual stated rate that SLB should offer its depositors?

  Compute the value of this stock with required return

Compute the value of this stock with a required return of 10 percent.

  What is profit or loss associated with copper

Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,100 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd