You are considering the purchase of a 25-year bond with a coupon rate of 11.5 percent. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require a 6.45 percent yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
You are considering the purchase of a 25-year bond with a coupon rate of 11.5 percent. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require a 6.45 percent yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 17P
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You are considering the purchase of a 25-year bond with a coupon rate of 11.5 percent. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require a 6.45 percent yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
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