Chapter 6: Bond Decision

Dunder Mifflen just issued a 20 -year annual bond with a par value of $1,000 and a coupon rate of 10.2%. The current yield-to-maturity is 4.0%. What is the intrinsic value of the bond and if the bond's current market price is $2,395, what should you do? $1,843 so you buy the bond $1,843 so you do not buy the bond $1,602 so you do not buy the bond $1,393 so you buy the bond $1,602 so you buy the bond