Question
Bold Corporation issued bonds on August 1, 2013 with a 0% coupon for years 1 through 3, a 5% coupon for years 4 through 7,
Bold Corporation issued bonds on August 1, 2013 with a 0% coupon for years 1 through 3, a 5% coupon for years 4 through 7, 8% coupons for years 8 through 10.The bond will mature on August 1, 2023. The bond is callable at a 5% premium at the end of the 6th year. The interest on these bonds is paid and compounded semi-annually. You buy the bond at the end of year 2 on August 1, 2015, two years after issuance. Determine the value (price) of a $1000 Bold Corporation bond as of August 1, 2015. Bond YTM is 6% and stock yield is 9%. The bond will be held until maturity (8 years from now).Interest is paid SEMI-ANNUALLY. Show the formulation of the problem using the (PV%,n)( PVA%, n)
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