A Company Issues a 20-Year, Callable Bond at Par with 6

question 22

Multiple Choice

A company issues a 20-year, callable bond at par with 6% annual coupon payments. The bond canbe called at par in three years or any time after that on a coupon payment date. The call price is $110 per $100 of face value. What is the yield to call?

• A) 4%
• B) 12%
• C) 9%
• D) 6%

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