A bonds issue, raised 3 years ago with 5 years to maturity, has the following characteristics....

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A bonds issue, raised 3 years ago with 5 years to maturity, has the following characteristics. Each bond has a par value of € 2000, the coupon rate is 2.9%. Coupons are paid annually. Bonds will be repaid in fine at par value. Currently, the issuer could raise debt at a 3.8% interest rate. Corporate tax rate is 34%. What is the price of ONE bond ? (answer in %, 2 decimal places; if you find 101.23%, just write 101.23). A bonds issue, raised 3 years ago with 5 years to maturity, has the following characteristics. Each bond has a par value of € 2000, the coupon rate is 2.9%. Coupons are paid annually. Bonds will be repaid in fine at par value. Currently, the issuer could raise debt at a 3.8% interest rate. Corporate tax rate is 34%. What is the price of ONE bond ? (answer in %, 2 decimal places; if you find 101.23%, just write 101.23).

Answer rating: 100% (QA)

To calculate the price of the bond we need to discount the future cash flows to their present value ... View the full answer