What is the value of the bond if rates drop immediately to


A company has a 9% bond that has a face value of $1000 and matures in 10 years. Assume that coupon payments are made semi-annually. The bonds can be called after 5 years at a premium of 5% over face value. What is the value of the bond if rates drop immediately to 4%? A) $1,266 B) $1,193 C) $457 D) $1,450 E) $1,332.

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Financial Management: What is the value of the bond if rates drop immediately to
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