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An 11-year, $1,000 face value bond has an annual coupon rate of 8% and its yield...

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Finance

An 11-year, $1,000 face value bond has an annual coupon rate of8% and its yield to maturity is 7.5%. The bond can be called 3years from now at a price of $1,060. What is the bond’s nominalyield to call?

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Current price of bond can be computed as Price of bond C x 11 1r nr M 1r n M Face Value 1000 C Coupon amount Face Value x Coupon rate No of coupon payments annually 1000 x 8 1 1000 x 008 80 r Rate of interest 75 or 0075 pa n No of    See Answer
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An 11-year, $1,000 face value bond has an annual coupon rate of8% and its yield to maturity is 7.5%. The bond can be called 3years from now at a price of $1,060. What is the bond’s nominalyield to call?

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