Problem 24-12 Call provisions

Refer to the following information:

Amount issued	$420 million
Offered	Issued at a price of 102.000% plus accrued interest (proceeds to company 98.717%) through Citi and JPMorgan
Interest	10.95% per annum payable June 15 and December 15.
Maturity	June 15, 2041
Denomination, face value, or principal	$1,000
Callable Remaining payments discounted at the treasury rate + 30 basis points

a. ATAM decides to call the bond one year before it is due to expire. The interest rate on one-year Treasury bonds is 6.95%. What price must ATAM pay to call the bonds? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)

b. If the interest rate on Treasury bonds is 15.95%. What price must ATAM pay to call its bonds? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)