Question: A 25 year bond has a $30,000 face value/par value with 20 years remaining until maturity. The bond is callable 10 years prior to maturity.

A 25 year bond has a $30,000 face value/par value with 20 years remaining until maturity. The bond is callable 10 years prior to maturity. The bond includes a financial enhancement of $500 ($500 premium to its face/par value) if it is called prior to maturity. The bond has a 5.2-% coupon rate and a market value of $26,742. The coupon on the bond is paid semi annually. Calculate the yield to call of the bond.

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