A $1,000 par value bond sells for $1,216. It matures in 20 years, has a 48...

A $1,000 par value bond sells for $1,216. It matures in 20 years, has a 48 percent coupon, pays interest semiannually, and can be called in 5 years at a price of $1197. What is the bond's Yield -to-Call?

Solutions

Expert Solution

The answer is 39.49%.The yield to call can be obtained from two formulae but I have applied the formulae which is most relevant. Kindly go through handwritten answer.

jeff jeffy answered 2 years ago

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