1. What is the value of a bond that has a par value of $1,000, a coupon rate of 17.24 percent (paid annually), and the matures in 8 years? Assume a required rate of return on this bond is 13.53 percent.
Round the answer to two decimal places.
All the work has to be shown!
2. General Mills has a $1,000 par value, 12-year bond outstanding with an annual coupon rate of 3.60 percent per year, paid semi-annually. Market interest rates on similar bonds are 12.70 percent. Calculate the bond's price today.
Round the answer to two decimal places.
All the work has to be shown!