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Suppose that eight years ago a corporation issued a 1 5 - year bond with a coupon rate of 7 % and the indenture specifies
Suppose that eight years ago a corporation issued a year bond with a
coupon rate of and the indenture specifies a makewhole call
premium of basis points over the yield on a comparable Treasury at
the time the call provision is exercised. Assume that the call is exercised
immediately after the payment of a coupon. At the time the issue is
called, the yield on a comparable Treasury is What is the makewhole call price per $ of par value if the issue is called at the end of
the eighth year?
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