Bond valuation Callaghan Motors' bonds have 5 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10.5%, and the yield to maturity is 6%. What is the bond's current market price?

Bond valuation Callaghan Motors' bonds have 5 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10.5%, and the yield to maturity is 6%. What is the bond's current market price?

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter7: Bonds And Their Valuation

Section: Chapter Questions

Problem 1P

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Question

Current market price of bond

Bond valuation Callaghan Motors' bonds have
5 years remaining to maturity. Interest is paid
annually, they have a $1,000 par value, the
coupon interest rate is 10.5%, and the yield to
maturity is 6%. What is the bond's current
market price?

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