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A firm has just issued a bond that has a face value of $1,000, a coupon rate of 8 percent paidsemi-annually, and matures in 8

A firm has just issued a bond that has a face value of $1,000, a coupon rate of 8 percent paidsemi-annually, and matures in 8 years.The bonds were issued at a discount ($950.35) with a yield to maturity of 8.88%.Assume that 3 years from now, the bond trades to earn an effective annual yield to maturity of 10%.At what price should this bond be trading for at the beginning of year 4?(4 marks)

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