Question
( Bond valuation ) National Steel's 15-year, $1,000 par value bonds pay 8 percent interest annually. The market price of the bonds is $1,100, and
(Bond valuation)
National Steel's 15-year, $1,000 par value bonds pay 8 percent interest annually. The market price of the bonds is $1,100, and your required rate of return is 8 percent.
a. What is the expected rate of return of the bond?
b. What is the value of the bond to you, given your 8 percent required rate of return?
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Valuation, Measuring And Managing The Value Of Companies
Authors: Tim Koller, Marc Goedhart, David Wessels
7th Edition
1119611865, 9781119611868
