Bettis Corporation issued 7 percent bonds 3 years ago with 22 years until maturity. The coupons are paid semiannually. Face value is $1000. The bonds currently sell for $1,365, but Bettis can call the bonds in seven years at a price of $1,035. What is the bond’s yield to call? Write your answer as a percentage out to two decimal places. Do not include the percentage sign in your answer
Bettis Corporation issued 7 percent bonds 3 years ago with 22 years until maturity. The coupons are paid semiannually. Face value is $1000. The bonds currently sell for $1,365, but Bettis can call the bonds in seven years at a price of $1,035. What is the bond’s yield to call?
Write your answer as a percentage out to two decimal places. Do not include the percentage sign in your answer.
Yield to call refers to the total return earned by the bondholders if the bond is held until the callable period before its maturity. In other words, it means out to be earnings which one earned from its investment in bonds if one held its bond investment till the time it was called before its actual maturity date.
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