QuickHelper

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Teaching Since: May 2017
Last Sign in: 352 Weeks Ago, 5 Days Ago
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  • MBA, PHD
    Phoniex
    Jul-2007 - Jun-2012

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    ChevronTexaco Corporation
    Feb-2009 - Nov-2016

Category > Business & Finance Posted 01 Jun 2017 My Price 13.00

Problem finance

Question description

 

McCue Inc.'s bonds currently sell for $1,250.  They pay a $90 annual coupon, have a 25-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? 

Answers

QuickHelper
(10)
Status NEW Posted 01 Jun 2017 05:06 PM My Price 13.00

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