McGriff Motors has bonds outstanding that will mature in 12 years. The bonds pay a 12 percent semiannual coupon and have a face value of $1,000 (that is, the bonds pay a $60 coupon every six months). The bonds currently have a yield to maturity of 10 percent. The bonds are callable in 8 years and have a call price of $1,050. What is the bonds’ yield to call?

McGriff Motors has bonds outstanding that will mature in 12 years. The bonds pay a 12 percent semiannual coupon and have a face value of $1,000 (that is, the bonds pay a $60 coupon every six months). The bonds currently have a yield to maturity of 10 percent. The bonds are callable in 8 years and have a call price of $1,050. What is the bonds’ yield to call?

McGriff Motors has bonds outstanding that will mature in 12 years.  The bonds pay a 12 percent semiannual coupon and have a face value of $1,000 (that is, the bonds pay a $60 coupon every six months).  The bonds currently have a yield to maturity of 10 percent.  The bonds are callable in 8 years and have a call price of $1,050.  What is the bonds’ yield to call?





a. 8.89%
b. 9.89%
c. 9.94%
d. 10.00%
e. 12.00%








Answer: B


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