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?

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 ago

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The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon....

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