Question
Problem 7-9 Longly Trucking is issuing a 20-year bond with a $2,000 face value tomorrow. The issue is to pay an 8% coupon rate, because
Problem 7-9
Longly Trucking is issuing a 20-year bond with a $2,000 face value tomorrow. The issue is to pay an 8% coupon rate, because that was the interest rate while it was being planned. However, rates have increased suddenly and are expected to be 8.6% when the bond is marketed. What will Longly receive for each bond tomorrow? Assume bond coupons are paid semiannually. Round PVFA and PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations. Round the answer to the nearest cent.
$
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
5th Edition
0030113172, 978-0030113178
