Calculate the return that an investor purchasing the bond

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Question - DM Inc.'s outstanding, callable bonds were issued seven years ago, with a coupon rate of 5%, original maturity of 25 years, par value of $1,000, call price of $1,100 and 10 years of call protection. The bonds are currently selling for $1,200. Interest rates are expected to remain stable in the next few years. Calculate the return that an investor purchasing the bond today should expect to earn.

Reference no: EM132887016

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