Problem 15-9 Valuing Callable Bonds 1 25 points New Business Ventures, Inc., has an outstanding perpetual bond with a coupon rate of 9 percent that can be called in one year. The bond makes annual coupon payments and has a par value of $1,000. The call premium is set at $150 over par value. There is a 60 percent chance that the interest rate in one year will be 11 percent, and a 40 percent chance that the interest rate will be 7 percent. If the current interest rate is 9 percent, what is the current market price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) eBook Print Current market price References