What price must atam pay to call the bonds

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Reference no: EM132403093

Amount issued $280 million

Offered Issued at a price of 98.500% plus accrued interest (proceeds to company 98.717%) through Citi and JPMorgan

Interest 6.85% per annum payable June 15 and December 15.MaturityJune 15, 2041

Denomination, face value, or principal$1,000

a. ATAM decides to call the bond one year before it is due to expire. The interest rate on one-year Treasury bonds is 2.85%(+ 30 basis points for call option). What price must ATAM pay to call the bonds? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)

b. If the interest rate on Treasury bonds is 11.85% (+ 30 basis points for call option). What price must ATAM pay to call its bonds? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM132403093

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