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Corso Books has just sold a callable bond. It is a? thirty-year quarterly bond with an annual coupon rate of 7% and ?$5,000 par value.
Corso Books has just sold a callable bond. It is a? thirty-year quarterly bond with an annual coupon rate of 7% and ?$5,000 par value. The? issuer, however, can call the bond starting at the end of 12 years. If the yield to call on this bond is 11% 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?
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