Question: A 8 % coupon rate, callable bond currently sells for $ 1 1 0 5 and has 1 2 years to maturity. The bond can

A 8% coupon rate, callable bond currently sells for $1105 and has 12 years to maturity. The bond can be called in 4 years for $1050. The current discount rate for bonds of this type is 6.7%. What return can a new buyer of this bond expect to earn? Answer is 12.5% how do i get?

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