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This answer will get multiple thumbs up if correct. Keep your answer till 4 decimal places The current interest rate is 7%. Next year, the
This answer will get multiple thumbs up if correct.
Keep your answer till 4 decimal places
The current interest rate is 7%. Next year, the interest rate will be 3.63% (with 40% probability) or 8.72%. A perpetual bond is callable at $1,077, and it will be called if the interest rate drops to 3.63%. What is the coupon amount (in $) if the bond is priced to sell at par?
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