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b) WAB Bonds are currently paying semi-annual coupons at a rate of 8.5% but interest rates have been forecasted to fall to 4% this year.
b) WAB Bonds are currently paying semi-annual coupons at a rate of 8.5% but interest rates have been forecasted to fall to 4% this year. What can WAB do to take advantage of these low interest rates assuming that the required provision is included in the bonds? What is the name of the provision that allows them to take advantage of these low rates? (5 Marks)
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