7-2YIELD TOMATURITY ANDCALLThatcher Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8 percent coupon rate, paid semiannually. The price of thebonds is $1,100. The bonds are callable in 5 yearsat a call price of $1,050. What is the yield to maturity? What is the yield to call?_______________________________________________(a)0 1 2 3 20i=?. . .40 40 40 40PV= 1,100 FV = 1,000202032111000140...140140140'dddddBkkkkkVvaluesBond2012011000140'tdtdBkkVvaluesBondWith your financial calculator, enter the following to find YTM:N=10 x 2=20PV=-1100PMT=0.08/2 x 1,000 =40FV=1,000I=YTM=?YTM=3.31%x 2=6.62%4