then the price that this bond trades for will be closest​ to

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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Question
The Sisyphean Company has a bond outstanding with a face value of
$5,000
that reaches maturity in
8
years. The bond certificate indicates that the stated coupon rate for this bond is
8.9​%
and that the coupon payments are to be made semiannually.
 
Assuming the appropriate YTM on the Sisyphean bond is
10.7​%,
then the price that this bond trades for will be closest​ to:
 
A.
$4,524
Your answer is correct.
 
B.
$3,619
 
C.
$6,334
 
D.
$5,429
 
 

 

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