Question
Callable bond. Corso Books has just sold a callable bond LOADING... . It is a thirty-year quarterly bond with an annual coupon rate LOADING... of
Callable bond. Corso Books has just sold a callable bond LOADING... . It is a thirty-year quarterly bond with an annual coupon rate LOADING... of 10% and $1,000 par value. The issuer, however, can call the bond starting at the end of 8 years. If the yield to call LOADING... on this bond is 12% and the call requires Corso Books to pay one year of additional interest at the call (4 coupon payments), what is the bond price if priced with the assumption that the call will be on the first available call date? What is the bond price if priced with the assumption that the call will be on the first available call date? $nothing(Round to the nearest cent.)
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