Masterpiece, a music instrument company, has just issued a perpetual bonds with a face value of $1,000. The bond pays an annual coupon of 10%. One year from now, there is an 65% probability that the interest rate (yield to maturity) on this bond will rise to 15%, and a 35% probability that it will fall to 5%. The current one-year interest rate is 10%.

Calculate the value, as of today, of an otherwise identical bond, except this one is callable in one year's time at a call price of $1,295 (assume the bond will be called if the value of the bond exceeds the call price).