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Corporate bonds usually have a call feature embedded in their contract, this means that the company can call those bonds earlier than maturity. This also

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Corporate bonds usually have a call feature embedded in their contract, this means that the company can call those bonds earlier than maturity. This also means the when you price a corporate bond you must calculate the YTM, if the bond is held to maturity, and the YTC, the yield up to the callable period of the bond. A T-MOBILE bond is currently selling for $775 with 7% coupon and a 7 year maturity. Assume the par(face) value is $1,000. Since this corporate bond, it is also callable at 5 years for $1,075 face value. Calculate the YTM and then the YTC. A. YTM = 8.85%, YTC = 14.62% B. Cannot be determined with the information given. C. YTM = 11.51% , YTC = 14.62% D. YTM = 10.42%, YTC = 11.51% = =

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