On October 15, 2012 the real estate company Robert hf. gave out a bond. Suppose we have bought 100 millions dollars at nominal valute of the bond at issue on par.
Interest rate: 4,3%
First interest date: 15 October 2012
Dayrule = 30/360
Date of issue: 15. October 2012
Bond maturity: 15. October 2042
You can't pay up the bond to October 2017 but in between 15. October 2017 and to 31. December 2022 you can pay up the bond.
a) What was the yield on the 15. October 2012 (YTM)?
b) What was the interest rate on the purchase?
c) What was the yield to call if the company pays the shares at the first rate?
d) Have is the yield to worst (YTW)?
e) If the bond will be paid on October 15th how much will we get paid? Namely what are the principal principal, principal principal and prepayment fee after the installment?
f) What would be the yield to maturity be on a similar bond on September 22, 2017 if the interest rate is unchanged from what you calculated in b?
g) How much value would be equivalent to non-callable bonds on October 15th. if we compare the yield to f?