A 12% coupon bond with semi-annual payments is callable in five years.The call price is $1,120.If the bond is selling today for $1,110, what is the yield to call?

Question

Quizplus · Accepted Answer

The yield to call is calculated by considering the bond's coupon payments, the call price, and the time until the bond can be called. Given the bond's price, coupon rate, and call price, the yield to call is approximately 10.95%.

A 12% Coupon Bond with Semi-Annual Payments Is Callable in Five