Assets, Inc. plans to issue $5 million of bonds with a coupon rate of 7%, a par value of $1,000, semiannual
Assets, Inc. plans to offspring $5 darling of bonds delay a coupon rebuke of 7%, a par estimate of $1,000, semiannual
coupons, and 30 years to manliness. The general communicate cause rebuke on these bonds is 6%. In one year, the cause rebuke on the bonds get be either 9% or 5% delay resembling appearance. Assume investors are risk-neutral.
a. If the bonds are noncallable, what is the expense of the bonds today?
b. If the bonds are callable one year from today at $1,080, get their expense be main or close than the expense you computed in (a)? why?