Problem $25-12$ Call provisions

Use Table $25\mathrm{.}1$ to answer the following questions:

Amount issued $ $600$ million

Offered Issued at a price of $99\mathrm{.}592\%$ plus accrued interest $($proceeds to company $98\mathrm{.}717\%)$ through Citi and JPMorgan

Interest $5\mathrm{.}85\%$ per annum payable June $15$ and December $15.$

Maturity June $15,2041$

Denomination, face value, or principal $ $1,000$

Callable Remaining payments discounted at the treasury rate $+30$ basis points

AMAT decides to call the bond one year before it is due to expire. The interest rate on one$-$year Treasury bonds is $2\%.$ What price must AMAT pay to call the bonds?

Note: Enter your answers in dollars, rather than in millions of dollars, rounded to $2$ decimal places.

If the interest rate on Treasury bonds is $10\%.$ What price must AMAT pay to call its bonds? $($Hint: AMAT will pay greater value between par face value and PV of remaining payments$)$

Note: Enter your answers in dollars, rather than in millions of dollars, rounded to $2$ decimal places.Problem $25-12$ Call provisions

Use Table $25\mathrm{.}1$ to answer the following questions:

a$.$ AMAT decides to call the bond one year before it is due to expire. The interest rate on one$-$year Treasury bonds is $2\%.$ What

price must AMAT pay to call the bonds?

Note: Enter your answers in dollars, rather than in millions of dollars, rounded to $2$ decimal places.

b$.$ If the interest rate on Treasury bonds is $10\%.$ What price must AMAT pay to call its bonds? $($Hint$.$ AMAT will pay greater value

between par face value and PV of remaining payments$)$

Note: Enter your answers in dollars, rather than in millions of dollars, rounded to $2$ decimal places.

a$.$ Price payable by AMAT

b$.$ Price payable by AMAT