Question
The mangold has two different bonds outstanding currently. Bond M has a face value of $35000 and matures in 35 years. The bond makes 750bp
The mangold has two different bonds outstanding currently. Bond M has a face value of $35000 and matures in 35 years. The bond makes 750bp + 3% payments for the first nine years of every six months, then pays 650 bp + 6% every six months over subsequent eight years and finally pays $1400 every six months over the last eighteen years. Bond N has a face value of $45000 and maturity of 43 years. It makes no coupon payment over the life of the bond. If the required return on the bond is nine percent compounded semiannually. What is the current price of bond M and N?
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