22. Problem 4-22 (Yield to Maturity and Vield to Call) Yield to Maturity and Yield to Call Amot International's bonds have a current market peice of $1,200. The bonds have a 10% annual coupan payment, a $1,000 foce value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price $1,090 ). a. What is the yield to maturity? Round your answer to two decimal places. b. What is the yeid to call if they are called in 5 years? Round your answer to two decimal ploces. c. Which yleld might investors expect to earn on these bonds, and why? I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. II. Investors would not expect the bonds to be called and to earn the rm because the rmM is less than the VTC. III. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. IV. Investors would expect the bonds to be called and to eam the YTC because the YTM is less than the YTC: d. The bond's indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5 . In Year 5 , they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and 50 on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors miaht expect the firm to call the bonds