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ABC Company issues a 25-year bond paying a 6% coupon selling at par. If ABC Company...

ABC Company issues a 25-year bond paying a 6% coupon selling at par. If ABC Company has the option to call the bonds in five years for 105% of par value, what is the bond’s YTC?

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Answer #1

YTC is calculated using the RATE function as follows:-

=RATE(nper,pmt,pv,fv)

=RATE(5,6%*100,-100,105)

=6.87%

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