About the issued bonds rate

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Reference no: EM13921925

Diesel company issued bonds with 12% coupon rate, semiannual coupon, $1,000 par value. Bonds mature in 40 years and are callable 5 years from now at $1120. Bonds are sold today at a price of $1300, and the yield curve is ownward sloping. What type of yield will you use as a most likely scenario (yield to call or YTM)? Write a formula; insert numbers (no calculation required). Is the YTM (or yield to call) higher or lower than the coupon rate?

Reference no: EM13921925

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