Consider the purchase of an outstanding bond

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On April 1, 2014, you consider the purchase of an outstanding bond that is issued on April 1, 2013. It has an 8% annual coupon and has a 30 year original maturity. It matures at the end of March 2043. There are five years of call protection, which is until the end of March 2018, at which time it can be called in with an 8% call premium. Interest rates have declined since it was issued, and it is now selling for 115.875% of its par value of $1,000. What is the YTM? show work

What is the YTC? Show work

If you decide to purchase the bond at the beginning of this month, April 1, 2014, which return would you expect to earn if the interest rates remain less than 8%, the YTM or YTC? Explain the answer,

Reference no: EM13775582

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