The price of a 23 year, 5% callable bond at call date is 1090 and its required rate is 4%. If the bond is callable at 3 years, what is the price of the bond now assuming it is called? If the firm does not redeem the bond, at the point that it may do so.

What is the price of it, if market rates are 11%?

Answer rating: 100% (QA)

To calculate the price of the bond assuming it is called we need to consider the cash flows until the call date 3 years and then the call price at tha... View the full answer