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Calculate the yield to maturity

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You are analyzing a bond and want to ensure that you calculate the Yield to Maturity and Yield to Call correctly. The bond has 16 years remaining to maturity. It is a semi-annual, 7% coupon, $1,000 par value bond. The current price of the bond is 94.5 as a percent of par. The bond is callable in 7 years at a call premium of 101 ($1,010)

a. Calculate the yield to maturity?

b. Calculate the yield to call?

c. What do you think the investors will actually earn? Why?

Reference no: EM132613676

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