Question
A 7%, five year bond is callable in two years at a call price of $2,000. The bond is currently priced in the market at
A 7%, five year bond is callable in two years at a call price of $2,000. The bond is currently priced in the market at $1,770. Assuming that the call value and the maturity value are the same, what is the issue's current yield?
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
