A Company Issues a Callable (At Par) Ten-Year, 6% Coupon

question 97

Multiple Choice

A company issues a callable (at par) ten-year, 6% coupon bond with annual coupon payments. The bond can be called at par in one year after release or any time after that on a coupon payment date. On release, it has a price of $104 per $100 of face value. What is the yield to worst of this bond when it is released?

• A) 0.60%
• B) 1.92%
• C) 4.00%
• D) 5.47%