Question
RG Company is about to issue a bond with semi-annual coupon payments, a coupon rate of 10%, and par value of $1,000. The yield-to-maturity for
RG Company is about to issue a bond with semi-annual coupon payments, a coupon rate of 10%, and par value of $1,000. The yield-to-maturity for this bond is 8%. I. What is the price of the bond if the bond matures in five years? [7 marks] II. What is the price of the bond if the bond matures in seven years? [7 marks] III. Based on the calculations, comment of the relationship of the bond price and the years to maturity.
URGENT
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
4th Edition
0256147175, 978-0256147179
