A firm has just issued a bond that has a face value of $1,000, a coupon rate of 8 percent paid semi-annually, and matures in 8 years

Finance Apr 27, 2022

A firm has just issued a bond that has a face value of $1,000, a coupon rate of 8 percent paid semi-annually, and matures in 8 years. The bonds were issued with a yield to maturity of 9 percent. Assume that 5 years from now, the bond trades to earn an effective annual yield to maturity of 10 percent. At what price should this bond be trading for at the beginning of year 6?