1. What are the YTM and the yield to call (YTC) on Badger Corpi's bonds?

2. If interest rates are expected to remain constant, what is the best estimate of the remaining life left for Bsdger Corp.'s bonds?

3. If Badger Corp. issued new bonds today, what coupon rate must the bonds have to be issued at par?

Solved Step By Step with Explanation: YTM and YTC

Where:

Market Price = $1,010.35

Next, let's calculate the yield to call (YTC). The yield to call is the yield if the bonds are called before maturity. In this case, the call price is $1,060, and the call period is 8 years.

The bond pricing formula for yield to call is the same as above, but we replace the maturity period (n) with the call period. Therefore:

YTC = ?

k = 8 (years until call)