Creative Financing, Inc., is planning to offer a $1,000 par value 15-year maturity bond with a coupon

Question:

Creative Financing, Inc., is planning to offer a $1,000 par value 15-year maturity bond with a coupon interest rate that changes every five years. The coupon rate for the first five years is 10 percent, 10.75 percent for the next five years, and 11.5 percent for the final five years. If you require an 11 percent rate of return on a bond of this quality and maturity, what is the maximum price you would pay for the bond?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...