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    Bond question: Given the facts, what would be the yield-to-c

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    As a bond investor, you have been offered a secondary bond as follows: exactly 5 years remaining to final maturity, 8% coupon payable on a semi annual basis, offer price of 106 yield to 3.2863% to maturity. The bond is callable 2 years from today with a premium of 1.50% of face value, ie redeemable at 101.5. You are concerned that the bond issuer, who is able to refinance at a meaningfully lower coupon, may call in the bonds. What would be your yield-to-call if you purchased?

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    As a bond investor, you have been offered a secondary bond as follows: exactly 5 years remaining to final maturity, 8% coupon payable on a semi annual basis, offer price of 106 yield to ...

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    This solution is comprised of a detailed explanation to answer what would be the yield-to-call if purchased.

    $2.19

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