abc company has outstanding bond has a 1,000 maturity value and a 4.5% coupon rate of interest paid semiannually. the bond was issued five years ago, matures in 10 years. if investors require a return equal to 6%
abc company has outstanding bond has a 1,000 maturity value and a 4.5% coupon rate of interest paid semiannually. the bond was issued five years ago, matures in 10 years. if investors require a return equal to 6%
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
Problem 4PROB
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abc company has outstanding bond has a 1,000 maturity value and a 4.5% coupon rate of interest paid semiannually. the bond was issued five years ago, matures in 10 years. if investors require a return equal to 6% to invest in similar bonds, what is the current market value of abc's bond?
(please use financial calculator and do we use the five years ago as our n? or do we use the matures in 10 years?)
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