Question
The Blassco Corporation has two different bonds. Bond A has a face value of $30,000 and matures in 20 years. The bond makes no payments
The Blassco Corporation has two different bonds. Bond A has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $800 every six months over the subsequent eight years, and finally pays $1,000 every six months over the last six years. Bond B has a face value of $30,000 and a maturity of 20 years. It makes no coupon payments over the life of the bond. If the required return on both these bonds is 8 percent compounded semiannually, what is the current price of Bond A? Of Bond B?
Please show the calculation process and formula.
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