Question
Ethan has an opportunity to buy a bond with a face value of $10,000 and a coupon rate of 8%, but payable quarterly (i.e. 2%
Ethan has an opportunity to buy a bond with a face value of $10,000 and a coupon rate of 8%, but payable quarterly (i.e. 2% for every 3 months).
If the bond matures in 9 years and Ethan can currently buy this bond for $4,000, what is his IRR for this investment?
| IRR > 24.0% | ||
| 18.0% < IRR < 24.0% | ||
| 12.0% < IRR < 18.0% | ||
| 6.0% < IRR < 12.0% | ||
| 1.0% < IRR < 6.0% |
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Corporate Finance Principles And Practice
Authors: Denzil Watson, Antony Head
5th Edition
0273725343, 978-0273725343
