Consider a callable bond with the face value of 1000 annual, Ask an Expert

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Consider a callable bond with the face value of $1000, annual coupon rate of 8%, the remaining term to maturity of 12 years and payments of coupons on a semi- annual basis.

The current yielf to maturity of this bond is 7% per annum. There is a equivalent bond which is non-callable. The current yield to maturity pf the equivalent non-callable bond is 6.4% per annum.

Find the value of the call to the issuer of the bond.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92322038

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