What is the fair market value of a bond with the following features: (a) par value...
What is the fair market value of a bond with the following features: (a) par value of $1000, (b) coupon payment of $60, and (c) 10-year maturity? Assume that current interest rates are 5%.
a. $930.00.
b. $1077.21.
c. $1110.00.
d. $1000.00.
Homework Answers
Where r is the discounting rate of period 5%
And n is the no of periods 10 years
= 463.30 + 613.91
= $ 1077.21
OPtion B is correct.
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