A Company Issues a 20-Year, Callable Bond at Par with A(n)

question 44

Multiple Choice

A company issues a 20-year, callable bond at par with a(n) 9% 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) 7%
• B) 15%
• C) 9%
• D) 12%

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Definitions:

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