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What is the current market price of the bond

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Question - New Business Ventures Inc. Has an outstanding perpetual bond with a 10% coupon rate that can be called in one year. The bound makes annual coupon payments, The call premium is set at $150 over per value. There is a 40% chance that the interest rate of in one year will be 12%, and a 60% chance that the interest will be 7%. If the current interest rate is 10%, what is the current market price of the bond?

Reference no: EM132560439

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