Question

A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 7% (3.5% per half-year).
Required:
a. What is its Yield to Call?
b. What is the yield to call if the call price is only $1 ,050?
c. What is the yield to call if the call price is $1100, but the bond can be called in two years instead of five years?

Answer 1

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