Yield to call It is now January 1, 2016, and you are considering the purchase of an outstanding bond that was issued on January l, 2014. It has a 8 5% annual coupon and had a 15-year original maturity (It matures on December 31, 2028.)
There is 5 years of call protection (until December 31, 2018), after which time it can be called at 109-that is, at 109% of par, or $1, 090. Interest rates have declined since it was issued, and it is now selling at 111.545% of par, or $1, 115 45
What is the yield to maturity? What is the yield to call?