Question
A 25-year maturity, 7.7% coupon bond paying coupons semiannually is callable in six years at a call price of $1,165. The bond currently sells at
A 25-year maturity, 7.7% coupon bond paying coupons semiannually is callable in six years at a call price of $1,165. The bond currently sells at a yield to maturity of 6.7% (3.35% per half-year). Required: a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the yield to call if the call price is only $1,115? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the yield to call if the call price is $1,165 but the bond can be called in three years instead of six years? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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