Finance 2023 Business & Finance

2023 Yield to Maturity and Yield to Call Kaufman Enterprises has bonds outstanding with a

Yield to Maturity and Yield to Call- Kaufman Enterprises has bonds outstanding with a $1000 face value and 10 years left until maturity. They have an 11% annual coupon payment, and their current price is


$ 1175.00 The bonds may be called in 5 years at 109% of face value (Call price=$1090).




a. What is the yield to maturity


b. What is the yield to call if they are called in 5 years.


d. The bond’s indenture indicates that the call provision gives the firm the right to call the bonds at the end of each year beginning in Year 5. In year 5, the bonds may be called  at 109% of face value, but in each of the next 4 years, the call percentage will decline by 1%. Thus in year 6 they maybe called at 108% of face value; in year 7, they maybe called at 107% of face value; and so forth. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?




  • Prepare a spreadsheet using Excel or a similar program in which you compute the items listed in parts a, b, and d. Be sure to compute the Yield-to-Maturity (YTM) and Yield-to-Call (YTC) for each of years 5, 6, 7, 8, and 9.

  • Utilizing Word, prepare a written report to your finance director:

    • Include a detailed explanation of the conclusion you reached concerning whether or not to call the bond before maturity.

    • If your recommendation is to call the bond early, explain when to call the bond and your rationale.

    • Discuss the advantages and disadvantages of using a long-term loan instead of a bond


We give our students 100% satisfaction for their assignment, which is one of the most important reasons students prefer us from other helpers. Our professional group and planners have more than ten years of rich experience. The only reason that our inception days, we have helped more than 100000 students with their assignments successfully. Our expert’s group have more than 2200 professionals of different topics, and that not all; we get more than 300 jobs every day more than 90% of the assignment get the conversion for payment.

Place Order Now