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The Cougar Corporation has issued 20-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 10% and the current
The Cougar Corporation has issued 20-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 10% and the current yield to maturity is 12%, what is the firm's current price per bond?
Answer: It's actually $859.54
Solve for PV in Excel:
=PV(12%/2, 20*2, -10%*1000/2, -1000)
= $849.54
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