Question
A 30-year maturity, 8.9% coupon bond paying coupons semiannually is callable in five years at a call price of $1,145. The bond currently sells at
A 30-year maturity, 8.9% coupon bond paying coupons semiannually is callable in five years at a call price of $1,145. The bond currently sells at a yield to maturity of 7.9% (3.95% 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 $1,095? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the yield to call if the call price is $1,145 but the bond can be called in two years instead of five years? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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