Question
It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has
It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 7.5% annual coupon and had a 30-year original maturity. (It matures on December 31, 2048.) There is 5 years of call protection (until December 31, 2023), after which time it can be called at 108that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 119.57% of par, or $1,195.70.
What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.
%
What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places.
%
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