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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Personal Finance
Authors: McGraw Hill
Student Edition
0078958393, 978-0078958397
