Question
Company A issues $100,000 TOTAL of bonds with a maturity of 5 years, which pay 3% interest annually. The bond yield to maturity is 3.5%.What
Company A issues $100,000 TOTAL of bonds with a maturity of 5 years, which pay 3% interest annually. The bond yield to maturity is 3.5%.What is the price of ONE bond today?
PV of interest payments:?_____________
PV of maturity amount:?_______________
Present price of the bond:?________________
Put an X next to the right answer:
This bonds sells at a?___________ Discount Premium
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
