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A corporation has two different bonds currently outstanding. Bond A has a face value of $30000 and matures in 20 years. The bond makes no
A corporation has two different bonds currently outstanding. Bond A has a face value of $30000 and matures in 20 years. The bond makes no payments for the first six years, then pays $1400 every six months over the subsequent eight years, and finally pays $1700 every six months over the last six years. Bond B also has a face value of $30000 and a maturity of 20 years; it makes no coupon payment over the life of the bond. The required return on both these bonds is 10% compounded semiannually. Without rounding intermediate calculations, what is the current price of each of them?
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