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Suppose that a firm issues a callable 20-year,semi-annual bond with a coupon rate of 7%. The par value of the bond is $5,000. The firm

Suppose that a firm issues a callable 20-year,semi-annual bond with a coupon rate of 7%. The par value of the bond is $5,000. The firm can call the bond starting at the end of the 6thyear. If the yield-to-call on the bond is 9% and the call requires the firm to pay one year of additional interest at the call (two coupon payments), what is the price of the bond if we assume it will be called on the first available date?

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