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Company currently has a nine yrs bond that is callable in four yrs from today with a call premium of 1%. This bond annual coupon
Company currently has a nine yrs bond that is callable in four yrs from today with a call premium of 1%. This bond annual coupon rate is 10% paid semi-annually and it is currently selling at $1,120 per share. What is the bond annual yield to call and the bond annual yield to maturity? Also, if general interest rate is expected to remains unchanged, based on comparison between yield to call and yield to maturity that you have calculated, do you think is best for this company to call this bond today and why or why not?
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