A Company Issues a Callable (At Par)five-Year,7% Coupon Bond with Annual

Multiple Choice

A company issues a callable (at par) five-year,7% coupon bond with annual coupon payments.The bond can be called at par in one year after release or any time after that on a coupon payment date.On release,it has a price of $110 per $100 of face value.What is the yield to worst of this bond when it is released?

A) 1.40%
B) 2.73%
C) 3.00%
D) 4.71%
E) 5.66%