Five years ago, the Sooner Corporation issued a 10% coupon (paid semi-annually), 20-year maturity bond with...

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Five years ago, the Sooner Corporation issued a 10% coupon (paid semi-annually), 20-year maturity bond with a 10 year deferred call feature and a call penalty of annual coupon payment in addition to the par value ($1000) if exercised. If the current market interest rate is 6%, what is its yield to call (%)? Five years ago, the Sooner Corporation issued a 10% coupon (paid semi-annually), 20-year maturity bond with a 10 year deferred call feature and a call penalty of annual coupon payment in addition to the par value ($1000) if exercised. If the current market interest rate is 6%, what is its yield to call (%)?

Answer rating: 100% (QA)

Solution YTC Coupon Rate Call Penalty Par Value Call Price In this case the Coupon Rate is 10 the Call Penalty is 10 and the Par Value is 1000 Since t... View the full answer