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New Homes has a bond issue with a coupon rate of 5.5 percent that matures in 12.5 years and is callable in 8.5 years. The

New Homes has a bond issue with a coupon rate of 5.5 percent that matures in 12.5 years and is callable in 8.5 years. The bonds have a par value of $1,000 and a market price of $972. Interest is paid semiannually. What is the yield to call?

a) 6.36 percent
b) 6.42 percent
c) 5.61 percent
d) 5.74 percent
e) 5.92 percent

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