Question
The Altoona Company issued a 25-year bond 5 years ago with a face value of $1,000. The bond pays interest semiannually at a 10.6% annual
The Altoona Company issued a 25-year bond 5 years ago with a face value of $1,000. The bond pays interest semiannually at a 10.6% annual rate.
a) What is the bond's price today if the interest rate on comparable new issues is 12%? Do not round intermediate calculations. Round PVFA and PVF values in intermediate calculations to four decimal places. Round the answer to the nearest cent. $
b) What is the price today if the interest rate is 8%? Do not round intermediate calculations. Round PVFA and PVF values in intermediate calculations to four decimal places. Round the answer to the nearest cent. $
c) What is the price today if the interest rate is 10.6%? Round the answer to the nearest cent. (note: I have tried putting $1000 as the answer and it is marked incorrect) $
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