GHI Co's 15-year bonds currently sell for $1,125 and have a par value of $1,000. The coupon rate is 9.45% and interest payments are made semi-annually. The bonds can be called 5 years after issue at a premium of 5% over par value. What is their yield to call (YTC), 1 year after the initial issue? O 6.9250% O`7.9391% O 5.8964% 079537%

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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GHI Co's 15-year bonds currently sell for $1,125 and have a par value of $1,000. The coupon
rate is 9.45% and interest payments are made semi-annually. The bonds can be called 5 years
after issue at a premium of 5% over par value. What is their yield to call (YTC), 1 year after the
initial issue?
O 6.9250%
7.9391%
O 5.8964%
7.9537%
O 6.8962%
Transcribed Image Text:GHI Co's 15-year bonds currently sell for $1,125 and have a par value of $1,000. The coupon rate is 9.45% and interest payments are made semi-annually. The bonds can be called 5 years after issue at a premium of 5% over par value. What is their yield to call (YTC), 1 year after the initial issue? O 6.9250% 7.9391% O 5.8964% 7.9537% O 6.8962%
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