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Currently, Cochran's Strength and Conditioning, Inc.'s semi- annual, 5% bonds sell for $900. The bonds have a 30-year maturity, and a $1,000 par value, but

Currently, Cochran's Strength and Conditioning, Inc.'s semi- annual, 5% bonds sell for $900. The bonds have a 30-year maturity, and a $1,000 par value, but it can be called in 5 years at $1,050. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Compute the bond's YTM and its YTC.Which yield do you think that the investor will receive? Why?

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