Question
A bond with a par value of 100 pays a coupon of 7% and will be redeemed in 6 years' time at 85. If investors
A bond with a par value of 100 pays a coupon of 7% and will be redeemed in 6 years' time at 85. If investors in corporate bonds with a similar risk profile require a return of 6%, what should the current market price (to the nearest pound) of the bond be?
A. 106
B. 85
C. 94
D. 100
E. 90
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
