What is yield to maturity

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Ford Motor Company has a bond that matures in 10 years. Its current coupon rate is 5.75%, payable semiannually. Today, the bond is priced at $1,125.00.

A) What is the yield to maturity? Formulate a sentence describing your answer.

B) The Ford Bond has a call option. The bond can be called in 3 years and the call listed in the bond agreement is $1075.25. Under these circumstances, what is the yield to call? Formulate a sentence describing your answer.

C) What is the current yield on this bond?

Reference no: EM132017639

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