Computing yield to call of a bond


1) Computing yield to call of a bond. Suppose a callable corporate bond with the face value of $1,000, a coupon interest rate of 8%, a market price of $928.39, and call premium of 9%. Also suppose that bond 12 years to go till it matures, but it is callable after 7 years.

2) Computing present value of the bond with semi-annual coupon interest payments. If the corporate bond with the face value of $1,000 has 8 years to go till it matures, has the coupon interest rate of 10%, paid semi-annually, and has the yield to maturity (YTM) of 8.5%, what must be its price in bond market?

3) Computing YTM of a bond with semi-annual interest payments. If the corporate bond with the face value of $1,000 has 8 years to go till it matures, has the coupon interest rate of 10%, paid semi-annually, and has the market price of $1,085.80.

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Finance Basics: Computing yield to call of a bond
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