Bob plans to purchase a callable bond of general electric


Bob plans to purchase a callable Bond of general electric. The bond is 20 year to maturity, carry 10.5% annual coupon, paid semi annually, and have $1000 par value. The bond is selling now for $1,187.40 each. The bond can be called back in 5 years at a call price of $1050.5. What is the yield to call for these bonds

a. 15.27% b. 8.87% c. 6.01% d. 6.87%

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Financial Management: Bob plans to purchase a callable bond of general electric
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