What is the price paid to the bondholder

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Problem: A 5.5 percent corporate coupon bond is callable in four years for a call premium of one year of coupon payments. Assuming a par value of $1,000, what is the price paid to the bondholder if the issuer calls the bond? (Assume annual interest payments.)

a. $1,055

b. $1,000

c. $55

d. $220

Reference no: EM131440074

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