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Seven Years Ago The Templeton Company Issued 20

Templeton issued 20-year bonds 7 years ago with an 11% annual coupon rate and $1,000 par value. The bonds had a 7.5% call premium and 5 years of call protection. Templeton has now called the bonds.

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charlie tuna
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1K views1 page

Seven Years Ago The Templeton Company Issued 20

Templeton issued 20-year bonds 7 years ago with an 11% annual coupon rate and $1,000 par value. The bonds had a 7.5% call premium and 5 years of call protection. Templeton has now called the bonds.

Uploaded by

charlie tuna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Seven years ago the Templeton Company issued 20-year bonds with an 11% annual coupon

rate at their $1,000 par value. The bonds had a 7.5% call premium,with 5 years of call
protection. Today Templeton called the bonds. Compute the realized rate of return for an
investor who purchased the bonds when they were issued and held them until they were called.
Explain why the investor should or should not be happy that Templeton called them.

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