Question
1. A $1,000 par value bond was just issued with a 30 year maturity and a...
1. A $1,000 par value bond was just issued with a 30 year maturity and a 6% coupon rate. If an investor has a required return of 8%, how much should they pay for this bond?
Make sure to include 2 decimals in your answer.
2. A $1,000 par value bond was originally issued with a 30 year maturity and a 9% coupon rate. 8 years have passed since the bond was issued and the bond now has 22 years left until maturity. If an investor has a required return of 6%, how much should they pay for this bond?
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