Bond 1 has a coupon rate of 00400 a face value of 10000 for


Bond 1 has a coupon rate of 0.0400, a face value of $10,000, for 20 years, pays dividends on a semi-annual basis, and a required yield (YTM) of 0.0350. What is the bonds valuation? What is the bond 1’s current yield? The bond will be called in 8 years, and have a call premium of $200. What is bond 1’s YTC (yield-to-call)? Remember to round to the nearest basis point. Note that one basis point is equal to 0.0001, which is 1/100th of a percent. Remember that the bond pays coupons on a semi-annual basis.

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Financial Management: Bond 1 has a coupon rate of 00400 a face value of 10000 for
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