What is the expected price of the bond

Reference no: EM133269604

Question - Nike launched a callable bond issue on June 2016 with maturity date on June 2026. This bond issue has a coupon rate of 3.25%, paid semiannually. The bond was issued at par in June 2016.

1. If Nike decides to call this bond issue on June 2023 and interest rates in the market have risen to 4%, what is the expected price of the bond in 2023?

2. Calculate the yield to call if the UA decides to call the bond in June 2023 under the conditions in part (a)?

3. What are the chances that UA would call the bond if the conditions in part (a) apply? Explain.

Reference no: EM133269604

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