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
B. $1,520
C. $1,420
D. $1,620
Answer: Option A
Solution (By Examveda Team)
Return rate on non-callable bond = Value of option issued to call debt - Return rate on callable bond= $940 - $480 = $460.
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