Another option for financing is to call in the outstanding, Ask an Expert

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Another option for financing is to call in the outstanding bonds you have issued and obtain a loan with more favorable terms than the bonds you would issue. Presently, the company has a 6% coupon bond that matures in 11 years. The bond pays interest semiannually.

What is the market price of a $1,000 face value bond if the current rate of interest is 12.9%?

How much will it cost the company to call in 1,000 of these bonds? Is it worth pursuing this strategy if your interest rate on a loan is 13%? show work

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91776005

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