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A 30-year maturity, 7.8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,160. The bond currently sells at a yield to maturity of 6.8% (3.40% per half-year).

a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call %

b. What is the yield to call if the call price is only $1,110? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call %

c. What is the yield to call if the call price is $1,160 but the bond can be called in two years instead of five years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call %

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91797717

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