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Business & Finance
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The royalties from sales of the music are used to pay interest and principal on the bonds. The bond was issued with a coupon rate of 6.9% and will mature on this day 28 years from now. The yield on the bond is currently 6.15%. At what price should this bond trade today, assuming a face value of $1,000 and annual coupons? Round to nearest cent

Jul 3rd, 2015

Thank you for the opportunity to help you with your question!

The Present value of the coupon 

PV1 = 69 sum (1/1.0615^n) n from 1 to 28 

=910.98

PV of the face value 

PV2 = 1000/(1.0615)^28 = 188.04

P = PV1+PV2 = 1099.02

 

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Jul 3rd, 2015

it states that this answer is incorrect


Jul 3rd, 2015

let me check, it should be 1144.88 

Jul 3rd, 2015

correct answer was 1105.62

Jul 3rd, 2015

I recheck, 1099.02 should be correct answer 


Jul 3rd, 2015

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