The bonds offered by Glenwood Studios are callable in 4 years at a quoted price of 106. What is the amount of the call premium on a $1,000 par value bond?

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The call premium is the amount above the par value that the issuer must pay to call the bond. The quoted price of 106 means the bond can be called at 106% of its par value. For a $1,000 par value bond, this is $1,060. The call premium is $1,060 - $1,000 = $60.

The Bonds Offered by Glenwood Studios Are Callable in 4