Question
Assume that a 10-year semi-annual, 9% bond is callable after 5 years at 105% of par value and the discount rate in today's market is
Assume that a 10-year semi-annual, 9% bond is callable after 5 years at 105% of par value and the discount rate in today's market is 5%.Using the price-to-worst method, what is the value of this bond?
A. $1,000
B. $1,149
C. $1,214
D. $1,223
E. $1,010
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Financial Management Principles and Applications
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
13th edition
134417216, 978-0134417509, 013441750X, 978-0134417219
