Question
In: Finance
The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon....
The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon. The 6 percent annual coupon bonds matures in 2035, and it is now 2020. Interest on these bonds is paid annually on December 31 of each year, and new annual coupon bonds with similar risk and maturity are currently yielding 10 percent. How much should Karen sell her bonds today?
Solutions
Expert Solution
assuming years to maturity=2035-2020=15 YEARS
How much should Karen sell her bonds today
=(250000*6%)*((1-(1+10%)^(-15))/10%)+250000/(1+10%)^15
=173939.20
the above is answer
jeff jeffy answered 2 years agoRelated Solutions
The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon....
The face value for WICB Limited bonds is $250,000 and has a 6
percent annual coupon. The 6 percent annual coupon bonds matures in
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similar risk and maturity are currently yielding 10 percent. How
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