Problem:
Nine years ago the Singleton Company issued 25-year bonds with a 11% annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, with 5 years of call protection. Today Singleton called the bonds.
Required:
Question: Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.
Note: Show all workings.