Problem:
Thatcher Corporation's bonds will mature in 16 years. The bonds have a face value of $1,000 and an 7.5% coupon rate, paid semiannually. The price of the bonds is $1,100. The bonds are callable in 5 years at a call price of $1,050.
Required:
Question 1: What is their yield to maturity?
Question 2: What is their yield to call?
Note: Show all workings.