Assume that the bond was issued at par value

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Reference no: EM131300147

XYZ Corporation has just issued a 20 year, 8% annual coupon bond that is callable after five years at a price of $1,075. The current yield to maturity of bonds with similar risk is 8% annually. Assume that the bond was issued at par value.

a) What is the yield to call of the bond if it was called after 5 years?

b) What is the yield to call if the bond was called 10 years after issuance?

Reference no: EM131300147

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