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A company has an 7% bond that has a face value of $1,000 and matures in 30 years. Assume that coupon payments are made semi-annually.

A company has an 7% bond that has a face value of $1,000 and matures in 30 years. Assume that coupon payments are made semi-annually. The bonds are callable after 15 years at 108% of par value. What is the value of the bond if rates drop immediately to 5%?

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