A Company Issues a Callable (At Par) 20-Year, 5% Coupon

question 72

Multiple Choice

A company issues a callable (at par) 20-year, 5% 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 $102 per $100 of face value. What is the yield to call of this bond when it is released?

• A) 2.94%
• B) 4.11%
• C) 5.60%
• D) 6.66%

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Definitions:

Game Playing

In organizational contexts, this refers to strategic actions individuals or groups take to gain advantage or manipulate situations to their benefit.

Language Attributes

Inherent features or qualities that define and distinguish a language, such as syntax, grammar, and vocabulary.

Self-Promotion

The act of advocating for oneself to advance one's own interests, particularly in careers or social standings.

Sales Representative

An individual who promotes and sells products or services on behalf of a company, aiming to reach sales targets and maintain customer relationships.