Problem 10-32 (Algo) A 25-year maturity, 8.4% coupon bond paying coupons semiannually is callable in six years at a call price of $1,120. The bond cu sells at a yield to maturity of 7.4% (3.70% per half-year). Required: a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call %

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Problem 10-32 (Algo)
A 25-year maturity, 8.4% coupon bond paying coupons semiannually is callable in six years at a call price of $1,120. The bond currently
sells at a yield to maturity of 7.4% (3.70% per half-year).
Required:
a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Yield to call
%
b. What is the yield to call if the call price is only $1,070? (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Yield to call
%
Transcribed Image Text:Problem 10-32 (Algo) A 25-year maturity, 8.4% coupon bond paying coupons semiannually is callable in six years at a call price of $1,120. The bond currently sells at a yield to maturity of 7.4% (3.70% per half-year). Required: a. What is the yield to call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call % b. What is the yield to call if the call price is only $1,070? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to call %
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