Ferrous Metals Has Bonds Outstanding Which It Is Calling Today

question 14

Multiple Choice

Ferrous Metals has bonds outstanding which it is calling today under the make-whole call provision.The bonds mature in 6 years,have a 10 percent coupon,pay interest semiannually,and have a par value of $1,000.What is today's call price given that the applicable discount rate is 7.20 percent?

• A)$879.12
• B)$968.35
• C)$1,015.55
• D)$1,134.49
• E)$1,172.71

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