2. A large corporation issucs both fixed and floating-rate bonds, with terms given in the following table: Coupon Bond Floating-Rate Bond 20 years 8% $250 million Issue size Maturity Current price (% of par) | 96 Current coupon Coupon rate Coupon payment period Every 6 months Every 6 months Callable Call price (% of par) | 106 $280 million 20 years 98 7% T-bill rate + 2%, adjusts every year Fixed coupon 10 years after issuc10 years after issue 102 (a) Caleulate the yield to maturity and yield to call of the fixed rate coupon bond. (b) Which bond will have greater price range? Why? (c) If the firm were to issue another fixed-rate note with a 20-year maturity, what coupon rate would it need to offer to issue the bond at par value? (d) Which bond has a high call risk (probability of call)? Why? 2. A large corporation issucs both fixed and floating-rate bonds, with terms given in the following table: Coupon Bond Floating-Rate Bond 20 years 8% $250 million Issue size Maturity Current price (% of par) | 96 Current coupon Coupon rate Coupon payment period Every 6 months Every 6 months Callable Call price (% of par) | 106 $280 million 20 years 98 7% T-bill rate + 2%, adjusts every year Fixed coupon 10 years after issuc10 years after issue 102 (a) Caleulate the yield to maturity and yield to call of the fixed rate coupon bond. (b) Which bond will have greater price range? Why? (c) If the firm were to issue another fixed-rate note with a 20-year maturity, what coupon rate would it need to offer to issue the bond at par value? (d) Which bond has a high call risk (probability of call)? Why