Question
Assume a $1,000 face value bond has a coupon rate of 8.6 percent paid semiannually and has an eight-year life. If investors are willing to
Assume a $1,000 face value bond has a coupon rate of 8.6 percent paid semiannually and has an eight-year life.
If investors are willing to accept a 10.6 percent rate of return on bonds of similar quality, what is the present value or worth of this bond? (Round final answer to nearest dollar amount.)
| Present value | $893.90 |
Your answer is incorrect.
What is the value of the bond if investors wanted an 8.1-percent rate of return? (Round final answer to nearest dollar amount.)
| Bond value | $__________ |
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Venture capital and the finance of innovation
Authors: Andrew Metrick
2nd Edition
9781118137888, 470454709, 1118137884, 978-0470454701
