Compare the 2 bonds Vulcan Materials Co and AAR Corp, AAR Corp Bond Performance
ID: 2786215 • Letter: C
Question
Compare the 2 bonds Vulcan Materials Co and AAR Corp,
AAR Corp
Bond Performance & Data
maturity date
amount
credit quality
price
coupon %
coupon type
callable
rule 144A
yield to maturity
1/15/2022
325
114
7.25
fixed
no
no
4.79
2/1/2026
22.7
middle
98
1.75
fixed
yes
no
1.93
Vulcan
Name
Maturity Date
Amount $ (mill)
Price
Coupon %
Coupon Type
(Fixed/Floating)
Yield to Maturity %
Vulcan Matis 7%
06/15/2018
400.0
111.4
7.000
Fixed
3.54
Vulcan Matis 6.4%
11/30/2017
350.0
108.8
6.400
Fixed
3.30
Bond Performance & Data
maturity date
amount
credit quality
price
coupon %
coupon type
callable
rule 144A
yield to maturity
1/15/2022
325
114
7.25
fixed
no
no
4.79
2/1/2026
22.7
middle
98
1.75
fixed
yes
no
1.93
Explanation / Answer
AAR CORP
If we compare the prices of bond i.e 114-98 = 16
If we compare the coupon % of bond = 7.25-1.25 = 6
If we compare the YTM of bond = 4.79-1.93 = 2.86
Vulcan
If we compare the prices of bond i.e 111.4-108.8 = 2.6
If we compare the coupon % of bond = 7.0-6.4 = 0.06
If we compare the YTM of bond = 3.54 - 3.30 = 0.24
Comparison (AAR CORP & VULCAN)
If we compare the price AAR corp has more price than Vulcan i.e 16 as it has more returns. So it will give more profit.
If we compare the coupon % AAR corp has more coupon % than Vulcan i.e. 6
If we compare the YTM AAR corp has more YTM than Vulcan i.e 2.86.
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