Prevailing rates on comparable securities

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Reference no: EM13882042

A 30-year corporate bond sold to investors at par ($1000) with a 10 percent coupon rate is called sixteen years later at a 12 percent call premium. At the time of call, prevailing rates on comparable securities were 8 percent. If the bond's holder reinvested the call price at 8 percent for fourteen years, what is his 30-year holding period yield?

Reference no: EM13882042

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