Yield to call (YTC)
Principles of Finance glossary · Valuation of Bonds & Stocks
Definition
The IRR on a callable bond's cash flows assuming it is called at the earliest call date.
Yield to call (YTC) in plain English
Some bonds are "callable," meaning the company that borrowed can pay you back EARLY — usually when interest rates drop and they'd rather refinance cheaply, a bit like you refinancing a mortgage. Yield to call is the return you'd actually earn if they do exactly that at the soonest date they're allowed to. It matters because that rosy "if held forever" return can shrink if the bond gets yanked away early, so YTC shows the more cautious picture. "IRR" here just means the single annual rate that makes all the cash you receive add up to what you paid.
Also called: YTC
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