Teo Corporation can prepay a bond with: 4 years to maturity 50000000 in remaining principal i =

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Teo Corporation can prepay a bond with:

4 years to maturity

50000000 in remaining principal

i = 10% yearly rate with monthly payments

It can replace this bond with a 4 year bond with the same remaining payment structure.

Prepayment penalties = 500000

At least what should the yearly rate of the newer bond be to justify Teo Company calling the original bond?

Posted Date: Sep 20, 2021 01:00 AM

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Teo Corporation can prepay a bond with: 4 years to maturity 50000000 in remaining principal i =

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