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A 25-year maturity, 7.4% coupon bond paying coupons semiannually is callable in six years at a call price of $1,180. The bond currently sells at
A 25-year maturity, 7.4% coupon bond paying coupons semiannually is callable in six years at a call price of $1,180. The bond currently sells at a yield to maturity of 6.4% (3.20% per half-year).
a. What is the yield to call?
b. What is the yield to call if the call price is only $1,130?
c. What is the yield to call if the call price is $1,180 but the bond can be called in three years instead of six years?
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