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Consider the following case of Grey Fox Aviation Company: Grey Fox Aviation Company has 9% annual coupon bonds that are callable and have 18 years
Consider the following case of Grey Fox Aviation Company: Grey Fox Aviation Company 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 $1,160.35. However, Grey Fox Aviation Company may call the bonds in eight years at a call price of $1,060. Grey Fox Aviation Company's bonds have a yield-to-maturity (YTM) of and a yield-to-call (YTC) of If interest rates are expected to remain constant, what is the best estimate of the remaining life left for Grey Fox Aviation Company's bonds? 10 years 18 years 8 years 13 years If Grey Fox Aviation Company issued new bonds today, what coupon rate must the bonds have to be issued at par
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