Business, 09.11.2019 00:31 lewismichelle11

New business ventures, inc., has an outstanding perpetual bond with a coupon rate of 11 percent that can be called in one year. the bond makes annual coupon payments and has a par value of $1,000. the call premium is set at $125 over par value. there is a 60 percent chance that the interest rate in one year will be 13 percent, and a 40 percent chance that the interest rate will be 9 percent. if the current interest rate is 11 percent, what is the current market price of the bond? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

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New business ventures, inc., has an outstanding perpetual bond with a coupon rate of 11 percent that...