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when ABC Company originally issued its callable 5.3%, 10-year bond, it was rated AA and priced to sell at par. The bond is callable at
when ABC Company originally issued its callable 5.3%, 10-year bond, it was rated AA and priced to sell at par. The bond is callable at the price that offers an equivalent yield to a Canada bond plus 0.11%. At that time, the credit spread over 10-year Canada bonds was 0.31%. The bond pays interest annually. What was the call price issue? Now, 5 years later , the bond rating agencies have raised the bond rating to AAA and the bond's yield to maturity is 4.8%. Equivalent-maturity Canada bonds are yielding 4.7%. What is the current call price?
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