Question: Solution and explanantion and please show work: Suppose that 8 years ago a corporation issued a 1 5 year bond with a coupon rate of
Solution and explanantion and please show work:
Suppose that years ago a corporation issued a year bond with a coupon rate of and the indenture specifies a make whole call premium of basis points over the yield on a comparable Treasury at the time the call provision is exercised. Assume that the call is excericised immediately after the payment of a coupon. At the time that the issue is called, the yield on a comparable Treasury is what is the makewhole call price per $ of par value if the issue is called at the end of the eighth year?
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