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Posted by: johnsonj
Price Quoted by Student: $2
Posted On: 2011-06-02 01:01:18

Bauer Inc, s bonds currently sell for $1,275 an have a par value of $1,000. They pay a

$120 annual coupon and have a 20-year maturity, but they can be called in 5 years at

$1,120. What is their yield to maturity (YTM)?

a.       8.78%

b.      8.99%

c.       9.15%

d.      9.33%

e.       9.41%

SOLUTION   YTM = I + (F – V)/n  &nb
Price $2
Attachment 1: Bauer Inc, s bonds.doc
Solution Posted By: Johnsonj    Posted on: 02-06-2011