Yield to call of the bond


Problem:

A 6.75% coupon bond with 13 years left to maturity can be called in 2 years. The call premium is one year of coupon payments. It is offered for sale at $919.75.

Required:

Question: What is the yield to call of the bond? Assume interest payments are paid semiannually.

  • 12.14%
  • 7.27%
  • 14.54%
  • 8.29%

Note: Please show the work not just the answer.

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Accounting Basics: Yield to call of the bond
Reference No:- TGS0890511

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