When ABC Company originally issued its callable 5.5%, 10-year bond, it was rated AA and priced to

Question:

When ABC Company originally issued its callable 5.5%, 10-year bond, it was rated AA and priced to sell at par. The bond is callable at t he price that offers an equivalent yield to a Canada bond plus .15%. At that time, the credit spread over 10-year Canada bonds was .25%. The bond pays interest annually.
a. What was the call p rice at issue?
Now, 5 years later, the bond rating agencies have raised the bond rating to AAA and the bond's yield to is 5%. Equivalent-maturity Ca nada bonds are yielding 4.9%.
b. What is the current call price?
c. Would ABC Company consider calling the bond now?
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...