Question
An investor has a bond that can be redeemed at a value of 250 after 6 years from now. The investor has just received
An investor has a bond that can be redeemed at a value of 250 after 6 years from now. The investor has just received a coupon of c and each subsequent semester coupon will be worth 2% more than the previous coupon. The present value of the bonds immediately after the first coupon payment is found to be 582.53 assuming an yield rate annual effective of 4%. a) Calculate the value of c. b) Determine the principal amount of the bond (principal) paid at the time of the 4th coupon
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Fundamentals of corporate finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
2nd Edition
978-0470933268, 470933267, 470876441, 978-0470876442
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