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Rocky believes that a bond he is purchasing today has an effective annual discount rate of 15%. The bond has 8 remaining coupons of $700
Rocky believes that a bond he is purchasing today has an effective annual discount rate of 15%. The bond has 8 remaining coupons of $700 each. The first coupon will be paid in 1 month, and each subsequent payment will be one year after. On the date of the last coupon payment the bond will pay out a face value of $10,000. What is the bonds present value if Rockys assumption of the discount rate is correct?
Select one:
a. 5,639
b. 7,286
c. 6,410
d. 6,479
e. 7,277
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