Q371
Value of option issued to call debt is 940 and return rate on callable bond is 480 then return rate on non-callable bond is
A.
$460
AnswerB.
$1,520
C.
$1,420
D.
$1,620
Answer: Option A
Solution
Answer: Option A
Solution:
Return rate on non-callable bond = Value of option issued to call debt - Return rate on callable bond = 480 = $460.