Q305
Value of option issued to call debt is 780 and return rate on callable bond is 370 then return rate on non-callable bond is
A.
$1,250
B.
$1,150
C.
$1,350
D.
$410
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Non-callable bond = Value of option issued to call debt - Return rate on callable bond = 370 = $410.