Question
Consider a 20-year, $1,000 bond with an 5% per annum coupon rate and annual coupons. The bond currently has 7 years left to maturity, at
Consider a 20-year, $1,000 bond with an 5% per annum coupon rate and annual coupons. The bond currently has 7 years left to maturity, at a current yield to maturity of 3.9%. This bond will be trading at a price of ?
(Round your answer to the nearest dollar)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the price of the bond we can use the present value of the bonds future cash flows The b...
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Step: 2
Step: 3
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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
