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What is the yield to call for this bond

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Question - Suppose you're given with the following information for some assets; a 12-year 2%-coupon bond of semi-annual coupon payment with face value as $1,000, a common stock of $3.20 expected dividend with 2.5% growth rate currently. Both bond and common stock are issued by Company M&M. Suppose the bond is in fact, callable. That is, the firm may repurchase it with the call price as $918 and the bond is callable at the end of year 4, what is the yield to call for this bond if the current bond price is $825?

Reference no: EM132927478

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