Question
A callable bond has 15 years to maturity and can be called in 5 years. The bonds coupon rate is 12% with semi-annual coupon payments.
A callable bond has 15 years to maturity and can be called in 5 years. The bonds coupon rate is 12% with semi-annual coupon payments. The par value is $1000. If the bond is called, the call price will be $1100. The bond is currently selling for $985.35 What is the difference between its yield-to-call and yield-to-maturity?
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International Financial Management
Authors: Cheol S. Eun, Bruce G.Resnick
6th Edition
71316973, 978-0071316972, 78034655, 978-0078034657
