Rascal Corporation bonds have a 9.60% coupon and a maturity value of $1,000. The bonds,...
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Rascal Corporation bonds have a 9.60% coupon and a maturity value of $1,000. The bonds, which pay interest semi-annually, will mature in 13 years, but the firm has the option to call the bond in 8 years at a premium amount of $109. You believe that Rascal will call the bonds in 8 years. If you require a pre-tax return of 9.5% on bonds of this risk, how much would you pay for one of these bonds today?
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