RollCall Corp issued a 6% semiannual bond on 4/15/2015 which matures on 4/15/2030. The issue has a MWC provision with a 50bps spread over the comparable Treasury. On 4/15/2019 the bond traded at 107.95. On the same date a comparable Treasury (the 5.5%'s of 2030) yielded 4%. If this bond can be called on 4/15/2019, calculate the call price. (par value=100)

Answer rating: 100% (QA)

To calculate the call price of the bond we need to compare the yield on the bond to the yield on the comparable Treasury and determine if it is advant... View the full answer