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Five years ago, the company issued 800 semi-annual bonds of 30 years maturity. The company has...

Five years ago, the company issued 800 semi-annual bonds of 30 years maturity. The company has no other debt on its books. Each bond has a par value of $1000 the yield to maturity has declined from 7% the time of issue to 6.7% today. what is the market value is A's debt today?

A. $828,924.66

B. $1,036.16

C. $835,089.30

D. $830,701.67

E. $415,430.30

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Homework Answers

Answer #1

Given,

No. of bonds = 800

Years to maturity = 30 years - 5 years = 25 years

Par value of one bond = $1000

Coupon rate = 7%

Yield to maturity = 6.7%

Solution :-

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