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Five years ago, a company issued a corporate bond that has a yield of 7% per annum paid semiannually. The face value of the bonds...

      

Five years ago, a company issued a corporate bond that has a yield of 7% per annum paid semiannually. The face value of the bonds is 10000 with a maturity period of 10 years. This bond can only be converted into 200 shares. If the bond was called, what is the call premium

  

Answers


Dana
The call premium of the bond is equal to the 1 year interest on the bond
7%*10000=700
The call premium is 700 shillings

Dana05 answered the question on July 15, 2019 at 15:08


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