Q7: The bonds of ABC Inc are currently selling for $1,250. The annual coupon payment of these bonds is $90. The bonds have a par value of $1,000 and a maturity period of 25-years; however, they are callable in 5 years at the call price of $1,050. Assume that no additional costs are incurred and that a yield curve is horizontal.

1. Calculate the difference between the bond's YTM and its YTC?
2. Who gets the benefit from callable bonds?