Question

A 3.80 percent coupon municipal bond has 10 years left to maturity and has a price quote of 94.35. The bond can be called in four years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the bond's current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current yield % Compute the yield to maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to maturity Compute the taxable equivalent yield (for an investor in the 35 percent marginal tax bracket). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Equivalent taxablo yield

Answer 1

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BOND - Microsoft Excel (Product Activation Failed) Add-Ins File Home Insert Page Layout Formulas Data Review View - 2x % Cut Calibri Dr General -11AA = = = D- DA E Copy Paste Format Painter Clipboard Wrap Text Merge & Center - BI U $ % , :.: Insert Delete Format Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill Z Sort & 2 Clear Filter Editing Find & Select Font Alignment Number Cells H396 Α B C D I G H I к 377 COUPON($) = CURRENT PRICE = CURRENT YIELD = 190 (5000 X 3.80%] 4717.5 [94.35% X 5000] 4.03% (190/4717.50] 5000 3.80% 95 [5000 X3.80%/2] 378 379 380 a 381 382 383 384 385 386 387 388 b 389 390 C 391 392 393 PAR VALUE COUPON RATE COUPON (SEMI ANNUAL) YEARS NO OF PERIODS YTM (SEMI ANNUAL) YTM ANNUAL) 10 20 2.2541% (=RATE(C386,-C384,C379,-C382)] 4.51% EQUIVALENT TAXABLE YIELD = 6.94% YTM/(1-t) 4.51%/(1-0.35) 394 CALLABLE IN YEARS NO OF PERIODS CALL PRICE YTC (SEMI ANNUAL) YTC(ANNUAL) 5190 (5000 + 190 (ONE YEAR COUPON)] 3.135% (=RATE(C393,-C384,C379,-C394)] 6.27% 395 396 d 397 ► Rea Sheet2 AFN BANKING NOTE 51 53 CLEAN PRICE $10 BIDDING, UNDERWRITING EUAC AW LIFE LP, IP, MRP, INFLATION WARRANT refund I YIELD SPOT 1 ferences S4 S5 S60 I BOI 120% - ELEB * * OENG 08-11-2019