Question
A company issues a 5% coupon, 10 year bond at 5% YTM. At the same time, the company issues a 5% coupon, 10 year bond,
A company issues a 5% coupon, 10 year bond at 5% YTM. At the same time, the company issues a 5% coupon, 10 year bond, callable in 5 years at par, at 5.25% YTM. Assuming the default risk of each is the same, what is the value of the call embedded in the callable bond?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
