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Question 5 Bond Features Face Value = $1,000 Coupon Rate = 5.00% Maturity in Years =...

Question 5

Bond Features
Face Value = $1,000
Coupon Rate = 5.00%
Maturity in Years = 10
Annual Coupons

The bond can be called in year 6
The market interest rate in year 6 = 3.00%
The call price is equal to $1,050

How much would the company save or lose if it calls the bond in year 6 ?

save $22.64
save $24.34
save $25.32
save $23.61
save $25.07
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