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Corporation ABC's 10% coupon rate, semiannual payment, $1,000 par value bonds, which matures in 20 years, are callable 5 years from now at a price
Corporation ABC's 10% coupon rate, semiannual payment, $1,000 par value bonds, which matures in 20 years, are callable 5 years from now at a price of $1,050. The bonds sell at a price of $1,462.30 now.
- What is the bond's YTM (yield to maturity)?
- What is the bond's current yield? (hint: current yield = coupon / bond price)
- What is the bond's capital gains yield? (hint: capital gain yield = yield to maturity - current yield)
- What is the bond's yield to call?
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