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A 1 0 0 0 - par value 3 0 - year bond has an annual coupon rate of 7 % paid semiannually. After an
A par value year bond has an annual coupon rate of paid semiannually. After an initial year period of call protection, the bond is callable immediately following the payment of any of the th through the th coupons.
i If the bond is called before payment of the th coupon, the redemption value is
ii If the bond is called immediately after the payment of any of the th through the th coupons, the redemption value is
iii If the bond is not called, it will be redeemed at par.
To ensure that the bond will provide at least an annual nominal yield rate of convertible semiannually, it must be assumed that the bond will be called or redeemed immediately after the payment of the th coupon.
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