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Today is January 1, 2009 and you are considering purchasing an outstanding bond that was issued on January 1, 2007. It has a 9.5% annual
Today is January 1, 2009 and you are considering purchasing an outstanding bond that was issued on January 1, 2007. It has a 9.5% annual coupon and originally had a 30-year maturity. (They mature on December 31, 2036.) The bonds can be called for 5 years from original issue date at a premium of $1,090. Interest rates have declined and the bonds are currently selling for 116.575% of par or $1,165.75. Calculate the YTM and the YTC.
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