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26 Nov 2019

Suppose East Coast Yachts’ issues the coupon bonds with a make-whole call provision. The make-whole call rate is the Treasury rate plus .40 percent. If East Coast were to call the bonds in 7 years when the Treasury rate is 5.6%, what is the call price of the bond? What if it is 9.1%

40 million dollars

20 years @ 6.5%

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