Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You own a corporate bond that has 2 6 years remaining until maturity. This bond has a par value of $ 1 0 0 ,

You own a corporate bond that has 26 years remaining until maturity. This bond has a par value of $100,000, a coupon rate of 9.5%, and the bond makes coupon payments on an annual basis (just one coupon payment per year). Since you bought this bond interest rates have dropped to only 6.5%, so they yield to maturity for this bond is now 6.5%.
What is the price of this bond?
Group of answer choices
$100,000
$97,786.34
$137,177.12
$93,778.97
$34,579.22
$33,287.16
$32,148.77
$31,789.44
$30,914.43
$30,274.10

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions