Question
Consider the following details for a bond issued by Bravo Incorporated. Issue date 8 May 2000 Maturity date 8 May 2030 Coupon rate (annual coupons)
Consider the following details for a bond issued by Bravo Incorporated.
| Issue date | 8 May 2000 |
| Maturity date | 8 May 2030 |
| Coupon rate (annual coupons) | 9% |
| Face value | $1000 |
If todays date is 8 May 2004 and a coupon has just been paid, what should the current trading price be for this bond if investors want a 12% annual return?
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International Financial Management
Authors: Jeff Madura
3rd Edition
0314862722, 978-0314862723
