Calculate the realized rate of return for brooks

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A company where J.B. Brooks works as the vice president of finance issued 20,000 bonds 10 years ago. the bonds had a face value of $1,000, annual coupon rate of 10 percent, and a maturity of 20 years. This year the market yield on the company's bond is 8 percent. The bonds are callable after 5 years at par. Now assume that the call premium is 5 percent and the bonds were called back today. JB Brooks purchased 10 bonds when they were originally issued at $950 per bond. Calculate the realized rate of return for Brooks.

Reference no: EM131067559

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