Problem:
The McDonnell Company has outstanding bonds with a coupon rate of 6.75% and semi-annual payments. The bonds are redeemable at their face value on December 30, 2032.
Required:
Question: If Weege can earn 5% on comparable investments and settle the transaction on March 24, 2015, how much should he be willing to pay per $100 of face value for the bond?
Note: Explain the solution in detail.