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Suppose that you purchased a bond with a provision that permitted the company, if it desired, to call the bonds 10 years after the issue
Suppose that you purchased a bond with a provision that permitted the company, if it desired, to call the bonds 10 years after the issue date at a price of $1,100. The number of years to maturity is 14. The annual coupon rate is 9%Suppose further that 1 year after issuance the going interest rate had declined, causing the price of the bonds to rise to $1,52 8.16. What would be the yield to call (YTC) on that bond? a. 4.5% b. 9.0% c.4.15% d.3.15% e. 8.15%
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