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A 3.75 percent corporate coupon bond is callable in four years for a call premuim of one year of coupon payments. Assumi...

A 3.75 percent corporate coupon bond is callable in four years for a call premuim of one year of coupon payments. Assuming a par value of $1,000 what is the price paid to the bondholder if the issuer calls the bond?
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Answer #1

Call Price = Fave Value + one year of coupon payment

Call Price = 1,000 + 37.50

Call Price = $1,037.50

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