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Three years ago, Diana's Cosmetics issued callable bonds with par value of $1,000, original maturity of 15 years, coupon rate of 8%, 5 years of

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Three years ago, Diana's Cosmetics issued callable bonds with par value of $1,000, original maturity of 15 years, coupon rate of 8%, 5 years of call protection, and call price of $1,100. In a recent transaction, the bonds traded for $1,178.18. An investor purchasing the bond in that transaction should expect to earn a yield of ___on this bond. **Assume interest rates will remain at current levels and that firms call back bonds any time interest rates fall.** 4% 5.89% 4.22% 2.85% O 3.53%

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