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Determine the yield-to-call (to nearest 0.1 of a percent) of an LTV bond with a 14...

Determine the yield-to-call (to nearest 0.1 of a percent) of an LTV bond with a 14 percent coupon, that pays interest semiannually. The bond can be called in 7 years, has a call premium of $140, and is currently selling for $1154. ( Show how to get to the result step by step) Thank you.

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Lets assume face value ofbond S1,000 Coupon rate-14% * 6/12-790 Per period Term to call7 Years2 14 Periods Current price of bond-S1,154 Call priceFace value + Call premium-$1,000+$140-$1,140 Yield to Call (YTC)Coupon amount+ (Call price - Current price) Term to call ] /[0.6 Current price0.4 Call price ] [S70+ ($1,140-$1,154) / 14 ] / [ 0.6 * SI,154 +0.4 * SI,140] $69 / $1.148.4 0.060083595 -6.0083595 % -6.01 % (Rounded) Yield to call-6.01% Per period * 2 12.02% Per annum

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