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What would be the advantage of Wallmart issuing "callable bonds"? What would that do to th

What would be the advantage of Wallmart issuing "callable bonds"? What would that do to th

What would be the advantage of Wallmart issuing "callable bonds"? What would that do to the price?

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Wal Mart

Coupon Rate 

5.00%

Maturity Date

10/25/2040

Last Traded Price $121.69

Last Trade Yield 3.637%

Last Trade Date 10/27/2016

Par Value 1,000

Coupon Payment $25.00 = 1000*(5%/2)

Interest Rate 1.819% = 3.637%/2

Nper 48 = (2040-2016) *2

Price of Bond $1,216.97 = PV (B3, B4-B2, B1)

With the current price of the bond at $1,216.96 it is considered a premium bond. This is because it is selling for more than the par value of the bond. Credit rating as well as interest rates certainly provides a good push regarding the power of the bond. The economy and inflation will also have an impact on the cost of a bond.

 

Abhinav 04-Dec-2019

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