A 30-year maturity, 8% coupon bond paying coupons semi annually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 7%
(3.5% per half-year).
a. What is the yield to call?
b. What is the yield to call if the call price is only $1,050?
c. What is the yield to call if the call price is $1,100 but the bond can be called in two years instead of five years?
a The yield to call= 6.74% b. The yield to call if the... View the full answer
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Yield to call (YTC) = [CI + (CP - MP) / N] / [(CP + MP) / 2] CI: Annual coupon interest = $1,000 x 8% = $80 MP: Market... View the full answer