A $1,000 face value corporate bond bearing a 12 percent coupon rate will mature in 10 years.  If the current market rate of return is 10 percent for bonds of this nature, what is the current theoretical market value of the bond (assume semiannual interest payments)?

Personal Finance
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ISBN:9781337669214
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Chapter14: Investing In Stocks And Bonds
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     A $1,000 face value corporate bond bearing a 12 percent coupon rate will mature in 10 years.  If the current market rate of return is 10 percent for bonds of this nature, what is the current theoretical market value of the bond (assume semiannual interest payments)?

 

Question 10 options:

 

A) 

$887.00

 

B) 

$1,124.62

 

C) 

$850.61

 

D) 

$1,170.27

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