Problem:
Alex plans to purchase a callable bond Verizon Inc. The bond is 20 year to maturity, Carrie 13.5% annual coupon, paid semi annually, and have a 1000 Par value. The bond is selling now $1287 each. The bond can be called back in seven years at a call price of $1067.50.
Required:
What is that yield to call for these bonds? Round two decimal places in percentage form. Show your all work and describe in detail.