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A 20-year maturity, 8.2% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,110. The bond currently sells at
A 20-year maturity, 8.2% coupon bond paying coupons semiannually is callable in seven years at a call price of $1,110. The bond currently sells at a yield to maturity of 7.2% (3.60% per half-year).
a. | What is the yield to call? b. What is the yield to call if the call price is only $1,060? c. What is the yield to call if the call price is $1,110 but the bond can be called in four years instead of seven years? |
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