A 4.85 percent coupon municipal bond has 22 years left to maturity and has a price quote of 103.70. The bond can be called in eight years. The call premium is one year of coupon payments. (Assume interest payments are semi annual and a par value of $5,000.)
Compute the bond’s current yield
Compute the Yield to Maturity
Compute the taxable equivalent yield for an investor in the 35% marginal tax bracket
Compute the yield to call.