Atlantis Fisheries issues zero coupon bonds on the market at a price of $447 per

Question

Atlantis Fisheries issues zero coupon bonds on the market at a price of $447 per bond. These are callable in 6 years at a call price of $520. Using semiannual compounding, what is the yield to call for these bonds? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Atlantis Fisheries issues zero coupon bonds on the market at a price of $447 per bond. These are callable in 6 years at a call price of $520. Using semiannual compounding, what is the yield to call for these bonds? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Explanation / Answer

Yield to Call of Zero cpn bond= Annual Interest + call price - market price/(number of years to call)/ call price+ mp/2

Annual int =0

call price =$ 520 market price=$ 520 number of years to call=6years

520--447/6)/520+447/2

73/6)/967/2 =12.167/483.50 =0.0252 or 2.52%

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