In 2004, TCC issued 8.625 percent debentures that will mature on December 1, 2044. a. If an investor purchased one of these bonds on December 1, 2014, for $1050, determine the yield-to-maturity.

Explain why investors would be willing to pay $1050 on December 1, 2014, for one of these bonds when they are going to receive only $1000 when the bond matures in 2044.

b. The TCC 8.625 percent debentures are callable by the company on December 1, 2019, at $1044.50. Determine the yield to call as of December 1, 2014, assuming that TCC calls the bonds on that date.