Five years ago, Jolly company sold at par a $1,000 bond with a coupon rate of 8 percent and 20 years to maturity. If this bond pays interest semiannually, what is the value of this bond to an investor who requires an 8 percent rate of return? * O $607.72 O $692.00 O $1,080 $1.000

Five years ago, Jolly company sold at par a $1,000 bond with a coupon rate of 8 percent and 20 years to maturity. If this bond pays interest semiannually, what is the value of this bond to an investor who requires an 8 percent rate of return? * O $607.72 O $692.00 O $1,080 $1.000

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter6: Bonds (debt) - Characteristics And Valuation

Section: Chapter Questions

Problem 5PROB

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Question

Five years ago, Jolly company sold at par a $1,000 bond with a coupon rate of 8
percent and 20 years to maturity. If this bond pays interest semiannually, what is
the value of this bond to an investor who requires an 8 percent rate of return? *
$607.72
$692.00
$1,080
$1,000

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