XYZ, Inc's issued 12% coupon rate bonds that mature in the year 2032. The bonds were issued 10 years ago with a maturity of 30 years and a par value of $1,000. They are currently seeling for $1,035.00. Assume the current date is 1/1/13.

1. What is the YTM (yield to maturity) of ZZZ bonds? What is the effective YTM (yield to maturity) on XYZ bonds?

2. If the ZZZ bonds are callable 15 years after issuance at a 12% penalty and you believe they will be called, what is the YTC (yield to call) on XYZ Bonds? What is the effective YTC (yield to call) on XYZ bonds?

3. If XYZ's investment bankers will charge 3.5% to issue new bonds with the same maturity date as the old bonds, what is the CTM (call to maturity) of new debt for XYZ? Assume the new bonds will be issued with a coupon rate that matches the YTM (yield to maturity) on the old bonds.