A corporate bond with an 11 percent semiannual coupon has a yield to maturity of 9 percent. The bond matures in 20 years but is callable in 10 years. The maturity value is $1,000. The call price is $1,055. What is the bond’s yield to call?
a. 8.43%
b. 8.50%
c. 8.58%
d. 8.65%
e. 9.00%
Answer: C
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