Question
Consider a 30-year bond that has a face value of $10,000 and a coupon rate of 9% with quarterly coupon payments. The yield to maturity
a. What is the maximum price would you be willing to pay for this bond right now?
b. What is the maximum price would you be willing to pay for this bond right after its 14th coupon payment?
c. What is the maximum price would you be willing to pay for this bond right after its 14th coupon payment if YTM at the time is expected to be 4%?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th International Edition
1265533199, 978-1265533199
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