What is the yield to maturity and yield to call

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Yield to call

It is now January 1, 2016, and you are considering the purchase of an outstanding bond that was issued on January l, 2014. It has a 8 5% annual coupon and had a 15-year original maturity (It matures on December 31, 2028.) There is 5 years of call protection (until December 31, 2018), after which time it can be called at 109-that is, at 109% of par, or $1, 090. Interest rates have declined since it was issued, and it is now selling at 111.545% of par, or $1, 115 45

a. What is the yield to maturity?

b. What is the yield to call?

Reference no: EM131492872

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