Question
Due to a newly established 10-year government contract, Advanced Aeronautical Technologies, Inc. prospects seem extraordinarily bright for at least the next 10-years. AAT will build
Due to a newly established 10-year government contract, Advanced Aeronautical Technologies, Inc. prospects seem extraordinarily bright for at least the next 10-years. AAT will build a new production facility and hire 1,500 new employees to work this contract. AAT has bonds outstanding that were issued 5 years ago at their par value of $1,000. These bonds have 15 years to maturity and a coupon rate of 5-percent, with interest paid semiannually. The required return on these bonds has decreased to 3.4-percent. What is the current value of one of these bonds?
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