Company RS’s bonds outstanding have a coupon rate of 6% and semiannual payments. If the YTM  on this bond is 7.9%, and considering that the face value of each bond is $10,000, calculate the  price of these bonds if the maturity will happen exactly 26 years from now.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 1P
icon
Related questions
Question

Company RS’s bonds outstanding have a coupon rate of 6% and semiannual payments. If the YTM 
on this bond is 7.9%, and considering that the face value of each bond is $10,000, calculate the 
price of these bonds if the maturity will happen exactly 26 years from now.

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Rate Of Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT