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Macy's has a level-coupon bond outstanding with $90.00 coupon interest payment, payable annually. The bond has 20 years to maturity, and similar corporate bonds currently
Macy's has a level-coupon bond outstanding with $90.00 coupon interest payment, payable annually. The bond has 20 years to maturity, and similar corporate bonds currently yield 7%. By a prior agreement with bondholders Macy's will skip the coupon payments in years 8,9, and 10. These coupons will be repaid without interest at maturity. What is the value of the bond?
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