A Company Issues a 10-Year, Callable Bond at Par with 8

Multiple Choice

A company issues a 10-year, callable bond at par with 8% annual coupon payments. The bond can be called at par in one year after issue or any time after that on a coupon payment date. The call price is $105 per $100 of face value. What is the yield to call if this bond is called in one year?

A) 13%
B) 5%
C) 8%
D) 11%