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A company issues a 20-year, callable bond at par with a(n) 9% annual coupon rate. The bond can be called in three years or any
A company issues a 20-year, callable bond at par with a(n) 9% annual coupon rate. The bond can be called in three years or any time after that on a coupon payment date. The call price is $110 per $100 of face value. On issue it has a price equal to par value. What is the yield to call?
I know the answer is 12%, but don't know how this value is calculated. Thanks in advance.
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