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Kauffman Enterprises has bonds outstanding with 10 years left to maturity, but they are callable in...

Kauffman Enterprises has bonds outstanding with 10 years left to maturity, but they are callable in 5 years with a quoted call price of 110. They have an 11% annual coupon rate and they pay interest semi-annually. Their current quoted price in the financial press is 117.5. What is the bond’s yield to call?

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Answer #1

Yield to call = 8.305933% as follows:

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