Scenario : Kaufmann enterprises has bonds outstanding with a face value of $1,000 and 10 years till maturity. They have an 11% annual coupon rate, and a PV of $1,175. They can be called in 5 years at 109% of face value. Starting in year 5, the bonds the firm has the right to call the bonds. In 4 yers the call percentage will decine by 1%. The question is: If the yield curve is horizontal and interest rates remain at current level, when is the latest that investors my expect the firm to call the bonds? The answer is in year 6, when the YTC is 8.27%. My question: I don't fully understand why the answer is 6? Can you elaborate? Also I got a YTM in year 6 of 7.3%, is that correct? I'm asking that you explain the answer.