Question
Bond prices and maturity dates. Moore Company is about to issue a bond with monthly coupon payments, an annual coupon rate of 10 %, and
Bond prices and maturity dates. Moore Company is about to issue a bond with monthly coupon payments, an annual coupon rate of 10 %, and a par value 0f $5,000. The yield to maturity for this bond is 13 %.
a.What is the price of the bond if it matures in 15 , 20 , 25 , or 30 years?
b.What do you notice about the price of the bond in relationship to the maturity of the bond?
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
8th Edition
0357714636, 9780357714638
