With celebrity bonds, celebrities raise money by issuing bonds to investors. The royalties from sales of the music are used to pay interest and principal on the bonds. In April of 2009, EMI announced that it intended to securitize its back catalogue with the help of the Bank of Scotland. The bond was issued with a coupon rate of

7%

and will mature on this day

39

years from now. The yield on the bond issue is currently

6.3%.

At what price should this bond trade today, assuming a face value of

$1,000

and annual coupons?