Suppose West Coast Yachts issues the coupon bonds with a makewhole call provision. The make-whole call rate

Question:

Suppose West Coast Yachts issues the coupon bonds with a makewhole call provision. The make-whole call rate is the Treasury rate plus 0.40 per cent. If West Coast calls the bonds in 7 years when the Treasury rate is 5.6 per cent, what is the call price of the bond?

What if it is 9.1 per cent?

Fantastic news! We've Found the answer you've been seeking!