A corporate bond with a coupon rate of 18% is maturing in 15 years. The bond...

 

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A corporate bond with a coupon rate of 18% is maturing in 15 years. The bond has a call provision of "after 9 at 120" (i.e. with 9 years of call protection and 20% call premium). If you buy the bond at a market price of $1,449.87, what would be the yield if you expect the bond will be called? A corporate bond with a coupon rate of 18% is maturing in 15 years. The bond has a call provision of "after 9 at 120" (i.e. with 9 years of call protection and 20% call premium). If you buy the bond at a market price of $1,449.87, what would be the yield if you expect the bond will be called?

Answer rating: 100% (QA)

The yield to call YTC can be calculated using the following formula YTC Where C i... View the full answer