Bond features-how much would the company save or lose if it


Bond Features

Face Value = $1,000

Coupon Rate = 3.00%

Maturity in Years = 10

Annual Coupons

The bond can be called in year 6

The market interest rate in year 6 = 2.00%

The call price is equal to $1,050

How much would the company save or lose if it calls the bond in year 6 ?

A. lose $11.57

B. lose $12.28

C. lose $11.92

D. lose $11.09

E. lose $12.40

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Financial Management: Bond features-how much would the company save or lose if it
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