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A company has an 8% 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 8% 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 20 years at 108% of par value. What is the value of the bond if rates drop immediately to 6%?
$1,277
$2,192
$1,452
$1,256
$602
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