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Assume a bond with the following parameters: What is it's Price to Call? Par Value $1,000...

Assume a bond with the following parameters: What is it's Price to Call?

Par Value $1,000
Call Premium $100
Coupon Rate 9.00%
Payments are Made Semi-Annually
Years to Maturity 30
Years to Call 15
Desired Return on Investment 12.00%
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Answer #1
                  K = Time to callx2
Bond Price =∑ [(Annual Coupon)/(1 + YTC/2)^k]     +   Call Price/(1 + YTC/2)^Time to callx2
                   k=1
                  K =15x2
Bond Price =∑ [(9*1000/200)/(1 + 12/200)^k]     +   1100/(1 + 12/200)^15x2
                   k=1
Bond Price = 810.94
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