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label Business & Finance
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

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 6.95% and will mature on this day 30 years from now. The yield on the bond is currently 6.2%. 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!

coupon PV = 936.53

PV of face value at maturity 

=1000/1.062^30 = 164.54

price = 164.54+936.53 = 1101.07

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 3rd, 2015

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