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A $15,000 par value bond with semiannual coupons of 8% convertible semiannually is redeemable in 30 years at par. It is callable on any coupon
A $15,000 par value bond with semiannual coupons of 8% convertible semiannually is redeemable in 30 years at par. It is callable on any coupon payment date at a call price of $17,000 from 15 years to 19.5 years, a call price of $16,000 from 20 years to 24.5 years, or a call price of $15,500 in 25 years. After 25 years, the bond is not callable. Determine the call date and price that will provide the purchaser with a guaranteed yield of at least 6.5% convertible semiannually regardless of whether the bond is called early or held to maturity.
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