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A 15-year corporate bond was issued last year with a 6% semiannual coupon and a par value of $1,000. The bond is callable in six
A 15-year corporate bond was issued last year with a 6% semiannual coupon and a par value of $1,000. The bond is callable in six years from today at a call price of $1,060. The price of the bond today is $1,125. What are the bonds yield to maturity and yield to call? Will an investor who buys this bond today expect to earn the yield to maturity or yield to call? Also calculate the current yield and capital gain (loss) yield of the bond.
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