Yield to call
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Yield to call (also known by its acronym, YTC) is the rate of interest earned on a bond if it is called. If current interest rates are well below an outstanding callable bond's coupon rate, then the YTC may be a more relevant estimate of expected return than the YTM because the bond is likely to be called.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Yield to call (YTC). The rate of interest earned on a bond if it is called. If current interest rates are well below an outstanding callable bond's coupon rate, then the YTC may be a more relevant estimate of expected return than the YTM because the bond is likely to be called.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
