Question

The 7 percent, semiannual coupon bonds offered by House Renovators are callable in two years at $1,035. What is the amount of the call premium if the bonds have a par value of $1,000?

Answer 1

Answer:

The call premium is $35

Step-by-step explanation:

Hi, the call premium is found as follows.

$Call Premium=CallPrice-Value$

$CallPremium=1,035-1,000=35$

So, the call premium is $35.

Best of luck.