Currently, Bruner Inc.'s bonds sell for $1,250. They pay a $120 annual coupon, have a 15-year maturity, and a $1,000 par value, but they can be called in 5 years at $1,050. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between this bond's YTM and its YTC? (Subtract the YTC from the YTM.)
A. 2.11%
B. 2.32%
C. 2.55%
D. 2.80%
E. 3.09%
Answer: A
You might also like to view...
A service results in ownership on the part of the client
Indicate whether the statement is true or false
What can US marketers learn about mobile marketing by looking overseas?
What will be an ideal response?
Merchandise Inventory increased $28,000 and Accounts Payable decreased $19,600 during the year. Accounts Payable relates only to the acquisition of merchandise inventory. Sales were $796,000 and Cost of Goods Sold was $549,700. Compute the payment made to the suppliers for inventory.
A) $577,700 B) $569,300 C) $597,300 D) $47,600
A more even distribution of income and increased urbanization are among the factors acting to reduce the traditional family size.
Answer the following statement true (T) or false (F)