Look at Table 24.1 :

a. Suppose the debenture was issued on September 1, 1992, at 99.489%. How much would you have to pay to buy one bond delivered on September 15? Don’t forget to include accrued interest.

b. When is the first interest payment on the bond, and what is the amount of the payment?

c. On what date do the bonds finally mature, and what is the principal amount of the bonds that is due to be repaid on that date?

d. Suppose that the market price of the bonds rises to 102 and thereafter does not change.

When should the company call the issue?

PROBLEM SETS R. A. Brealey, I. A. Cooper, and M. Habib, “Using Project Finance to Fund Infrastructure Investments,” Journal of Applied Corporate Finance 9 (Fall 1996), pp. 25–38.

The readings listed at the end of Chapter 17 include several articles on financial innovation.

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