Last year Tesla issued a callable eight$-$rear, $5\%$ coupon bond with semi$-$annual coupon payments. Two semi$-$annual coupons have already been paid. The bond can be called at a price of $$103$ per $$100$ face value in $2$ vears $(3$ vears at the time of the bond issuance$).$ The bond is currently trading at a price of $$95$ per $$100$ face value.

a$)$ What is the bond's yield to manurity? $(25$ points$)$

b$)$ What is the bond's yield to call? $(25$ points$)$

c$)$ What is the bond's yield to woret? $(25$ points$)$

a$)$

b$)$

$P=4,PV=-203PMT=2\mathrm{.}5,FV-100$

$\frac{\text{I}}{Y}=1\mathrm{.}72\%2=\mathrm{.}0344$

$(3\mathrm{.}44\%)$

C$)$ The Yeile to verst is $3\mathrm{.}44\%.$ The.tere, $0?+4,b.$

$25$

$+6$