{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# copy3 - Problem 5 11 Yield to Call and Realized Rates of...

This preview shows pages 1–2. Sign up to view the full content.

Problem 5 - 11. Yield to Call and Realized Rates of Return. Nine years ago, Goodwyn and Wolf incorporated sold a 16 year bond with a 11% annual coupon rate and a 10% call premium. Today, G& W called the bonds. The bonds originally were sold at their face value of \$1000. Compute the realize rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price. __%. The realized rate of return is the return that would make the present value of interest received and the call amount equal to the initial price paid by the investor. The realized rate of return can be calculated using the RATE function Initial Price \$1,000 Call Price \$1,100 Years till call 9 years Annual interest 110 Rate of return 11.69% Problem 11-7 NPV Your division is considering two investment projects, each of which requires an up front expenditure of \$23 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 4

copy3 - Problem 5 11 Yield to Call and Realized Rates of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online