Consider the case of RTE Inc.:

RTE Inc. has $9\%$ annual coupon bonds that are callable and have $18$ years left until maturity. The bonds have a par value of $$1,000,$ and their current

market price is $$1,160\mathrm{.}35.$ However, RTE Inc. may call the bonds in eight years at a call price of $$1,060.$ What are the YTM and the yield to call $($YTC$)$

on RTE Inc.$\text{'}$s bonds?

Value

YTM

YTC