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2) Bad Wolf Enterprises issues $8 million in 15.000% bonds maturing April 28, 2036. The bond is callable April 28, 2021 at a call premium

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2) Bad Wolf Enterprises issues $8 million in 15.000% bonds maturing April 28, 2036. The bond is callable April 28, 2021 at a call premium of 1.000%. April 28, 2021 the prevailing yield is 2.500%. If Bad Wolf Enterprises calls the entire issue and replaces it with 2.500% bonds also maturing April 28, 2036 then Each semi-annual coupon payment will decrease by The present value of the decrease in coupon payments is The principal repayment at maturity will increase by The present value of the increase in the principal repayment is The present value of this decision to the company - to the nearest dollar - is The company should (CALL/ NOT CALL) the bond

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