A 12% Coupon Bond, Semi-Annual Payments, Is Callable in Five

question 79

Multiple Choice

A 12% coupon bond, semi-annual payments, is callable in five years.The call price is $1,120; if the bond is selling today for $1,110, what is the yield to call

• A)12.03%
• B)10.86%
• C)10.95%
• D)9.14%
• E)None of the options

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Definitions:

Cost Of Completion

the estimated total expense required to finish a project, product, or service, often used in budgeting and financial projection.

Normal Profit

The minimum profit necessary for a company to remain competitive in its market, covering its opportunity costs.

Replacement Cost

The cost required to replace an asset with a new one of similar kind and quality at current prices.

Cost Of Completion

The estimated expenses associated with finishing a project, product, or service in its entirety.