Firm is planning to issue a callable bond

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A firm is planning to issue a callable bond with 7.9% coupon and 19 years to maturity. A straight bond with similar coupon is priced at $1,091.38. If the value of the issuer's call option is estimated to be $42.72, what is the value of the callable bond? Show your answer to the nearest $.01. Do not use the $ or , sign in your answer.

Reference no: EM131357705

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