Merck inc has 100 million dollars of 20 year bonds outstanding with a coupon rate of 9% with annual payments. Similiar risk bonds selling for YTM of 7%. Merck is going to call the bond this year (they had a call provison at 104), four years after the bond issue date. As a bondholder going through this who bought the bond at par of $ 1000.00 at the soutset, would you make the yield to call (YTC) or the yield to maturity?
B. Please calculate the YTC under this case. Disregarding interest, how much case would you recieve per bond at the call?