Assuming there is no compound interest, let's say you pay $4,000 for a perpetual bond from CosoNostra Pizza Inc. with a 3% yearly coupon rate. Assume a discount rate equal to the current interest rate and round up all responses to the closest dollar. Interest rates are raised from 3% to 5% due to changes in the economy. How much can you get for your bond now that market interest rates have changed?

Assuming there is no compound interest, let's say you pay $4,000 for a perpetual bond from CosoNostra Pizza Inc. with a 3% yearly coupon rate. Assume a discount rate equal to the current interest rate and round up all responses to the closest dollar. Interest rates are raised from 3% to 5% due to changes in the economy. How much can you get for your bond now that market interest rates have changed?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 4P

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