Thayer Corporation's bonds will mature in 10 years. The bonds have a 9% coupon rate with...
Thayer Corporation's bonds will mature in 10 years. The bonds have a 9% coupon rate with interest paid annually. The price of the bonds is $1,100. The bonds are callable in 4 years at a call price of $1,045. What is the bonds' YTM? What is the bonds' yield to call (YTC)?
Homework Answers
| a. | |||||
| YTM | =rate(nper,pmt,pv,fv) | Where, | |||
| = 7.54% | nper | = | 10 | ||
| pmt | = | $ 90.00 | |||
| pv | = | $ -1,100.00 | |||
| fv | = | $ 1,000.00 | |||
| b. | |||||
| YTM | =rate(nper,pmt,pv,fv) | Where, | |||
| = 7.06% | nper | = | 4 | ||
| pmt | = | $ 90.00 | |||
| pv | = | $ -1,100.00 | |||
| fv | = | $ 1,045.00 |
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