Question
A bond has a $1,000 face value (FV = $1,000) and a 14 percent couponor legal interest rate and it pays interest annually.The bond will
A bond has a $1,000 face value (FV = $1,000) and a 14 percent
couponor legal interest rate and it pays interest annually.The bond will mature in 2030 and
thebondholder will receive his/her coupon payment on April 29 of each year (so the bond just
madeits most recent payment).The current market rate (r) is 17.5 percent.What is the dollar
value ofeach annual coupon payment (C, in $) and what are the total number of coupon
paymentsremaining for this bond until it matures in2030?Finally, what is the current market
price of thisbond today (PV), on April 30, 2020?
Annual Payment C ($) =
Total Number of CouponPayments Remaining =
Value of Bond (PV) on 4/30/2020 =
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