Ryngaert Inc. recently issued bonds that mature in 15 years but that are CALLABLE in 5 years. They have a par value of 1,000 and an annual coupon of 5.7%. If the current market required return for these bonds is 7.0% and the call premium is 5% of par, at what price should the bonds sell?
How do I set up this problem? Do I use the current mart required return or the annual coupon rate?