A 5 25 percent coupon bond with 14 years left to maturity can be called in four years The call premium is one year of coupon payments It is offered for sale at $1,075 50 What is the yield to call of the bond (Assume interest payments are semiannual ) ...

The TVM calculation may look complex nevertheless with certain though ...

A 5.25 percent coupon bond with 14 years left to maturity can be called in four years.

Question:

A 5.25 percent bond with 14 years left to can be called in four years. The call premium is one year of payments. It is offered for sale at $1,075.50. What is the yield to call of the bond? (Assume interest payments are semiannual.)

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...