You hold a 20 year bond callable in 5 years at a call price


You hold a 20 year bond callable in 5 years at a call price of 1,100; the bond has annual payments of 10% of its par value of $1,000. Current bond price is $948.20.

a. Find the yield to maturity.

b.  Find the yield to call.

c. Do you think the issuer is likely to call the bond in 5 years? Why or why not?

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Financial Management: You hold a 20 year bond callable in 5 years at a call price
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