Bond valuation you are interested in buying a $1,000 par value bond with 10 years to maturity and an 8 percent coupon rate that is paid semiannually. How much should you be willing to pay for the bond if the investor's required rate of return is 10 percent?
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Answer:
$ 600
Explanation:
p=$ 1000
r =8/2
t=10 years
amount = (p×r×t)/100
=$ 10400
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