A Company Issues a 10-Year, Callable Bond at Par with 8

question 57

Multiple Choice

A company issues a 10-year, callable bond at par with 8% annual coupon payments. The bond can be called at par in one year after issue or any time after that on a coupon payment date. The call price is $105 per $100 of face value. What is the yield to call if this bond is called in one year?

• A)13%
• B)11%
• C)8%
• D)5%

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Definitions:

Neurological Condition

A disorder affecting the nervous system, which includes the brain, spinal cord, and nerves.

Defibrillator

A defibrillator is a medical device used to deliver a dose of electric current (shock) to the heart in order to correct irregular heart rhythms and potentially prevent cardiac arrest.

Irregular Heart Rhythm

An abnormality in the frequency or pattern of the heartbeat, which can include conditions such as arrhythmias.

Regular Sinus Rhythm

The normal heart rhythm, originating from the sinoatrial node, characterized by a consistent rate and rhythm.