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A firm has $1,000 par 8.5% coupon rate bonds (Coupon paid semi-annually). These bonds were issued two years ago with an original maturity of 25 years. The bonds are “callable bonds” and may be called in 3 years from now with a call price of $1085. Currently these bonds are selling in the market for 95% of par value.

 

 

a. Find Yield to Maturity

 

 

b. Find Yield to Call

 

 

c. Find Current Yield and Capital Gains Yield

 

 

d. Find Effective Yield

 

 

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