question archive A company XYZ issued 30 year bonds with 10% annual coupon rate at their par value of $1000 in 2010

A company XYZ issued 30 year bonds with 10% annual coupon rate at their par value of $1000 in 2010

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A company XYZ issued 30 year bonds with 10% annual coupon rate at their par value of $1000 in 2010. The Bonds had a 7% call premium, with 5 years of call protection. Today XYZ called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued in 2010. Briefly explain why the investor should or should not be happy.

 

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