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Li’s company has just issued a ten-year bond with a coupon rate of 5% and YTM...

Li’s company has just issued a ten-year bond with a coupon rate of 5% and YTM of 8%. The bond is callable at the end of the fifth year and the call premium is $50. If the par value of the bond is $1,000 and the coupon is paid every six month, calculate yield to call.

a. 5.0%

b. 8.0%

c. 5.6%

d. 11.2%

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