Sadik Inc.\'s bonds currently sell for $1,280 and have a par value of $1,000. Th
ID: 2667800 • Letter: S
Question
Sadik Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call?
Sadik Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call? Sadik Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call?
Explanation / Answer
Sadik Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call?
answwer : 7.45%
5 years -n
pv-------- $1,280
pay a $135 annual coupon ----pmt
FV--------$1,050
What is their yield to call= I/YR = 7.45%
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