Blue Moose Home Builders Inc. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1220.35. However, Blue Moose Home Builders Inc. may call the bonds in eight years at a call price of $1,060.
What are the YTM and yield to call (YTC) on bonds?
Blue Moose Home Builders Inc.’s bonds have a yield-to-maturity (YTM) of and a yield-to-call (YTC) of
a) 6.84%, 6.91%, 8.32%, 8.55%, 9.89%, 7,64%, 9.23% b.) 6.05%, 6.84%, 8.55%, 8,32%, 9.89%,6.91%,7.64%, 9.23%
If interest rates are expected to remain constant, what is the best estimate of the remaining life left for Blue Moose Home Builders Inc.’s bonds?
18 years
13 years
8 years
5 years
If Blue Moose Home Builders Inc. issued new bonds today, what coupon rate must the bonds have to be issued at par? 8.32%,9.23%, 9.89%, 6.84%, 7.64%, 8.55%,6.91%,6.05%
