Zippen Industries 8.250% bonds mature October 3, 2029. The bond is callable October 3, 2023 at 9.000 call premium. The offer on the bond to settle October 3, 2015 is currently 71.589 a. The Yield to Maturity is 12.625 % b. and the Yield to Call is 15.103 %

The yield to maturity is 12.69%

The yield to call 15.29%

Explanation:

The yield to maturity can be computed using the rate formula in excel, which is : rate (nper, pmt,-pv, fv)

nper is the 14 which number of years to maturity

pmt is the periodic coupon on the bond 8.25%*$100=$8.25

pv is the current price of the bond at $71.589

fv is the face value of the bond payable on redemption which is $100

=rate (14,8.25,-71.589,100)

=12.69%

The yield to call also be computed same way

nper is 8 years

pmt is the same at $8.25

pv is $71.589

fv is at 9% premium $100 * (1+9%) = $109

=rate (8,8.25,-71.589,109)

=15.29%