A municipal bond has 20 years until maturity and sells for $5,515. It has a coup

Question

A municipal bond has 20 years until maturity and sells for $5,515. It has a coupon rate of 5.20 percent and it can be called in 5 years. What is the yield to call if the call price is 110 percent of par? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

A municipal bond has 20 years until maturity and sells for $5,515. It has a coupon rate of 5.20 percent and it can be called in 5 years. What is the yield to call if the call price is 110 percent of par? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Explanation / Answer

Call price (here it is FV) $                               5,500.00 Coupon rate 5.20% Number of compounding periods per year 1 Interest per period (PMT)                                       260.00 Bond price (PV) $                              -5,515.00 Number of years to call 5 Number of compounding periods till call (NPER) 5 Bond Yield to call RATE(NPER,PMT,PV,FV) Bond Yield to call 4.66% RATE(5,260,-5515,5500)

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