Finance questions....

Business & Finance
Tutor: None Selected Time limit: 1 Day

Grossnickle Corporation issued 20-year, noncallable, 7.8% annual coupon bonds at their par value of $1,000 one year ago.  Today, the market interest rate on these bonds is 5.5%.  What is the current price of the bonds, given that they now have 19 years to maturity?

Jul 12th, 2015

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

Bond valuation: 
Par value = Maturity value = FV = $1,000 
Coupon rate = 7.8% 
Years to maturity = N = 19 
Required rate = I/YR = 5.5% 
(Coupon rate)(Par value) = PMT = $75 
PV = $1,232.15

Please let me know if you nea case for torture by michale levined any clarification. I'm always happy to answer your questions.
Jul 12th, 2015

answers will be on 

$1,114.94

 

$1,165.62

 

$1,507.70

 

$1,266.98

 

$1,064.26  


SO...

Jul 12th, 2015

$1,266.98

is correct calculation error

Jul 12th, 2015

okay, thank you so much

Jul 12th, 2015

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