Problem:
Eades has 9% annual coupon bonds that are callable and have 18years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,220.35. However, Eades may call the bonds in eight years at a call price of $1,060.
Required:
What are the YTM and yield to call on Eades Corp. Bonds?
If the interest rates are expected to remain constant, what is the best estimate of the remaining life left for Eades Corp?
If Eades issued new bonds today, what coupon rate must the bonds have to be issued at par?
Explain in detail and also provide step by step solution.