Quantitative Problem: Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 7.8% with semiannual payments of $39, and a par value of $1,000. The price of each bond in the issue is $1,260.00. The bond issue is callable in 5 years at a call price of $1,078. What is the bond's current yield? Do not round intermediate calculations. Round your answer to two decimal places. % What is the bond's nominal annual yield to maturity (YTM)? Do not round intermediate calculations. Round your answer to two decimal places. % What is the bond's nominal annual yield to call (YTC)? Do not round intermediate calculations. Round your answer to two decimal places. Assuming interest rates remain at current levels, will the bond issue be called? The firm -Select- call the bond.

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.