Homework answers / question archive /  Calculate the value of a bond that will mature in 8 years' time and has a $1000 face value

 Calculate the value of a bond that will mature in 8 years' time and has a $1000 face value

Business

Share With

 Calculate the value of a bond that will mature in 8 years' time and has a $1000 face value. The coupon interest rate is 9%p.a. paid annually and the bond investor's required rate of return is 12%. 

(b) If the Market Price of the bond is $930, should the investor purchase the bond? (Give a reason for your answer