1. Ozarks Managed Care Inc. issued some callable bonds 19 years ago with 30-year life at their par value of $1,000. These bonds pay 9% coupon rate with annual payment. The firm just announced that these bonds are being called with $100 call premium. A non- callable bond with the same features (time till maturity; coupon rate, and par value) and same risks are selling at $1195 a piece on the market today. What's the yield to maturity on the non-callable bonds? Please round your answer to 2 decimal places and skip the %sign, e.g. put 2.35 instead of 2.35%.
1. Ozarks Managed Care Inc. issued some callable bonds 19 years ago with 30-year life at their par value of $1,000. These bonds pay 9% coupon rate with annual payment. The firm just announced that these bonds are being called with $100 call premium. A non- callable bond with the same features (time till maturity; coupon rate, and par value) and same risks are selling at $1195 a piece on the market today. What's the yield to maturity on the non-callable bonds? Please round your answer to 2 decimal places and skip the %sign, e.g. put 2.35 instead of 2.35%.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter20: Hybrid Financing: Preferred Stock, Warrants, And Convertibles
Section: Chapter Questions
Problem 1P: Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually...
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![1. Ozarks Managed Care Inc. issued some callable bonds 19 years ago with 30-year life at their par value of $1,000. These bonds pay
9% coupon rate with annual payment. The firm just announced that these bonds are being called with $100 call premium. A non-
callable bond with the same features (time till maturity; coupon rate, and par value) and same risks are selling at $1195 a piece on the
market today. What's the yield to maturity on the non-callable bonds? Please round your answer to 2 decimal places and skip the
%sign, e.g. put 2.35 instead of 2.35%.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F34299ba6-42fb-4b1e-9c3c-c6d3e36d35d0%2F4e032fd8-6533-44ff-9f01-0b59f45d554f%2Fgdptvcq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Ozarks Managed Care Inc. issued some callable bonds 19 years ago with 30-year life at their par value of $1,000. These bonds pay
9% coupon rate with annual payment. The firm just announced that these bonds are being called with $100 call premium. A non-
callable bond with the same features (time till maturity; coupon rate, and par value) and same risks are selling at $1195 a piece on the
market today. What's the yield to maturity on the non-callable bonds? Please round your answer to 2 decimal places and skip the
%sign, e.g. put 2.35 instead of 2.35%.
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