KIC Inc. plans to issue $$7\mathrm{.}2$ million of bonds with a coupon rate of $16$ percent paid semiannually and $36$ years to maturity. The current

one$-$year market interest rate on these bonds is $15$ percent. In one year, the interest rate on the bonds will be either $18$ percent or $9$

percent with equal probability. Assume investors are risk neutral.

a$.$ If the bonds are non$-$callable, what is the price of the bonds today? $($Do not round intermediate calculations. Enter the answer in

dollars. Round the final answer to $2$ decimal places. Omit $ sign in your response.$)$

Price of the bonds

$

b$.$ If the bonds are callable one year from today at $$1,575,$ will their price be greater or less than the price you computed in part $($a$)?$

Greater than

Less than

c$.$ If the bonds are callable one year from today at $$1,575,$ what is the current price of the bond? $($Do not round intermediate

calculations. Enter the answer in dollars. Round the final answer to $2$ decimal places. Omit $ sign in your response.$)$

Current price of the bond

d$.$ What is the value of the call provision to the company? $($Do not round intermedlate calculations. Enter the answer in dollars.

Round the final answer to $2$ decimal places. Omit $ sign in your response.$)$

Call value