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

question 70

Multiple Choice

A company issues a 20-year, callable bond at par with 6% annual coupon payments. The bond can be 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)9%
• B)6%
• C)12%
• D)4%

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Definitions:

Esophagus

A muscular tube connecting the throat (pharynx) with the stomach; food is pushed through it by peristaltic movements.

Salivary Amylase

An enzyme found in saliva that starts the process of starch digestion in the mouth.

Nutrient

Substance that an organism must acquire from the environment for growth and survival.

Cecum

A pouch connected to the junction of the small and large intestines which plays a role in absorbing fluids and salts that remain after intestinal digestion.