Keenan Industries Has a Bond Outstanding with 15 Years to Maturity,an

question 141

Multiple Choice

Keenan Industries has a bond outstanding with 15 years to maturity,an 8.75% coupon paid semiannually,and a $1,000 par value.The bond has a 6.50% nominal yield to maturity,but it can be called in 6 years at a price of $1,050.What is the bond's nominal yield to call?

• A)5.01%
• B)5.27%
• C)5.54%
• D)5.81%

---

Definitions:

Intangibles

Non-physical assets owned by a business, such as patents, trademarks, and goodwill, that have value but cannot be touched or seen.

Drilling Rights

Legal permissions or licenses granted to individuals or companies to explore for and extract minerals, oil, or gas from the land.

Exploration Licenses

Exploration licenses grant the right to explore for natural resources, such as oil, natural gas, or minerals, in a designated area.

Stripping Activity Asset

An asset resulting from the removal of overburden or waste materials in mining operations, where the activity provides better access to mineral ore.