Please help me with all parts of this problem. Thanks Santos Energy has 9.5% ann

Question

Please help me with all parts of this problem. Thanks

Santos Energy has 9.5% annual coupon bonds outstanding with 15 years left until maturity. The bonds have a face value(FV) of $1,000 and their current market price (PV)is $1,060.25. What is the YTM on Santos's bonds? 8.64% 8.18% 8.76% 10.82% 7.90% What is the current yield on Santos's outstanding bonds? 8.76% 8.75% 8.35% 8.96% -0.20% What is the expected capital gains yield on Santos's outstanding bonds? -0.20% 0.31% -0.28% 8.96% -0.37% Santos's bonds have a call provision that allows Santos to call the bonds in five years at a call price of $1,040, What is the yield to call(YTC) on the bonds? 12.84% 8.64% 6.85% 8.76% 12.08% what rate of return can investors expect to earn on Santos's bonds if they purchase them today? 8.03% 7.43% 8.47% 8.64% 8.76%

Explanation / Answer

1. YTM = =RATE(15,95,-1060.25,1000) = 8.76% 2. Current yield = Coupon/current price = 95/1060.25 = 8.96% 3. Exp CG yield = (FV-PV)/PV = (1000-1060.25)/1060.25 = -5.68% This yield is over 15 yrs. SO per year CG yield = -5.68%/15 = -0.37% 4. YTC=RATE(5,95,-1060.25,1040) = 8.64% 5. Return expected today is nothing but YTM = 8.76% as above

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