Hazeltine Corp Has a Callable Bond Outstanding

question 89

Multiple Choice

Hazeltine Corp has a callable bond outstanding. The call provision guarantees that the bond won't be called in the first ten years of its life, and if it is called thereafter the bondholder will be compensated with an extra two year's interest at the 14% coupon rate. The bond is now four years into its 25 year life. The market interest rate is now 7%, so it is likely that the bond will be called as soon as the contract allows. What should the bond sell for today?

• A)$1,523.53
• B)$1,428.39
• C)$1,338.23
• D)$2,199.96

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Definitions:

Distinct Personalities

Refers to the presence of two or more distinct and relatively enduring personality states within a single individual, often related to dissociative identity disorder.

One Body

a concept that could refer to a unified or holistic approach to something, emphasizing the integration or unity of parts.

Personality Disorders

Disorders in which a person adopts a persistent, rigid, and maladaptive pattern of behavior that interferes with normal social interactions.

Maladaptive Pattern

Behavior patterns that negatively affect a person’s ability to function in daily life.