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QWE wishes to issue a perpetual callable bond that pays 7.1% annual coupon. The current interest rate is 7.1%. Next year, the interest rate will

QWE wishes to issue a perpetual callable bond that pays 7.1% annual coupon. The current interest rate is 7.1%. Next year, the interest rate will be 2.0% or 9.5% with equal probability. The bond is callable at $1,050, and it will be called if the interest rate drops to 2.0%. What is the issue price of this callable bond?

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