3. 3.

Valuing bonds [LO 7.2] Even though most corporate bonds in Australia make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a face value of €1 000, 23 years to maturity and a coupon rate of 3.8 per cent paid annually. If the yield to maturity is 4.7 per cent, what is the current price of the bond?