You are considering purchasing a bond that has a $1,000 par value, 5% coupon paid semi-annually, 20 years to maturity. Bonds with similar risk and maturity are now yielding 4%. What is the bond's current market value?

You are considering purchasing a bond that has a $1,000 par value, 5% coupon paid semi-annually, 20 years to maturity. Bonds with similar risk and maturity are now yielding 4%. What is the bond's current market value?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 8P

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You are considering purchasing a bond that has a $1,000 par value, 5% coupon paid
semi-annually, 20 years to maturity. Bonds with similar risk and maturity are now
yielding 4%. What is the bond's current market value?

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