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1. Calculate the value of the bond shown below, assuming it pays interest annually.
Par value = $1,000
Coupon Interest Rate = 9%
Years to Maturity = 14
Required Return = 12%

Value of the bond = $ _____________ (Round to the nearest cent)

Submitted: 1125 days and 3 hours ago.
Category: Tax
Value: $5
Status: CLOSED
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Accepted Answer

 

The Present Value of a Bond= The Present Value of the Coupon Payments (an annuity)+The Present Value of the Par Value (time value of money)

=596.54+204.62

=$801.16

 

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Expert: RD
Pos. Feedback: 99.4 %
Accepts: 
Answered: 10/24/2006

Certified Public Accountant (CPA)

CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..

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