Atlantis Fisheries issues zero coupon bonds on the market at a price of $484 per

Question

Atlantis Fisheries issues zero coupon bonds on the market at a price of $484 per bond. Each bond has a face value of $1,000 payable at maturity in 10 years. It is callable in 5 years at a call price of $620. Using semiannual compounding, what is the yield to call for these bonds?

Atlantis Fisheries issues zero coupon bonds on the market at a price of $484 per bond. Each bond has a face value of $1,000 payable at maturity in 10 years. It is callable in 5 years at a call price of $620. Using semiannual compounding, what is the yield to call for these bonds?

Explanation / Answer

yield to call for these bonds 2.5%

Yield to Call Calculation

Yield to Call Calculation

Type AnnualSemi-Annual Bond Face Value USD Bond Price 1000USD Coupon Rate 0% Years to Maturity 10 Call Price 620 USD Years to Call 5

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