Bond characteristics-coupon rate and maturity of bond

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You purchase today a callable annual coupon rate bond under the following conditions: Bond characteristics: Coupon rate: 7.5% Maturity of bond: 20 years Call Premium: 8% Time to call period: 4 years Current YTM: 8.5% Expected hold assumptions: Expected hold time: 4 years Reinvestment rate (average money market return): 2.1% Expected YTM (non-callable bonds) at sale: 4.0% Based upon the above items, find the Horizon Yield (HY) for this bond position. Please show steps.

Reference no: EM131069146

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