eBook Nine years ago the Templeton Company issued 27-year bonds with a 12% annual coupon rate at their $1,000 par value. The bonds had an 8% call premium, with 5 years of call protection. Today Templeton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places Why should or should not the investor be happy that Templeton called them? 1. Investors should be happy. Since the bonds have been called, interest rates must have risen sufficiently such that the YTC is greater than the YIM. If investors wish to reinvest their interest receipts, they can now do so at higher interest rates. It Investors should be happy. Since the bonds have been called, investors will receive a call premium and can declare a capital gain on the tax return Investors should be happy. Since the bonds tave been called, investors will no longer need to consider reinvestment rate is IV. Investors should not be happy. Since the bends have been called, interest rates must have fallen suffciently such that the YTC is less than the YTM. If investors wish to revest their interest receipts, they must do so at lower interest rates