Question: Suppose Lyft issued a 10 year bond. It is callable in 2 years at a call price of 1,050. The bond has annual payments of

Suppose Lyft issued a 10 year bond. It is callable in 2 years at a call price of 1,050. The bond has annual payments of 5% of its par value of $1,000. Current bond price is $980.

a. Find the yield to maturity.

b. Find the yield to call.

c. What rate of return is the bondholder likely to get? Why do you think so?

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