Consider a callable bond where the issuing firm can buy back the bond at a previously agreed price right before the coupon payments are due. The call price in period 0 is 100 EUR and in period 1 is 104.5 EUR (a) When should the issuing Firm call the bond? (Hint: The firm is trying to maximize shareholder wealth which is equivalent to minimizing the value of the bond). (b) Assume that the firm follows the optimal call policy. What is the value of the bond? Consider a callable bond where the issuing firm can buy back the bond at a previously agreed price right before the coupon payments are due. The call price in period 0 is 100 EUR and in period 1 is 104.5 EUR (a) When should the issuing Firm call the bond? (Hint: The firm is trying to maximize shareholder wealth which is equivalent to minimizing the value of the bond). (b) Assume that the firm follows the optimal call policy. What is the value of the bond