An issue of 9.60% senior debentures matures on December 15, 2029 and currently trade at 104.65 Interest is paid semi-annually and December 15 is a coupon anniversary date. [Assume today is December 15, 2020 so term to maturity is 9 years.] The debentures are callable on or at any time thereafter on the dates shown on the schedule below for the prices shown on the schedule. First call is 4 years away. What is the Yield to Maturity of the bonds?

December 15, 2020-2023 2024 2025 2026 2027 2028

Call Price No Call 104% 103% 102% 101% 100.5%

37. Assuming interest rates or yields and credit quality remain at their current levels:

1. It would be profitable for the issuer to refinance and call the bonds on July 15, 2024.
2. It would NOT be profitable for the issuer to refinance and call the bonds on July 15, 2024.
3. The issuer would be indifferent to refinancing and calling the bonds on July 15, 2024.
4. All of the above answers are correct.
5. None of the above answers is correct.