Creative Financing, Inc., is planning to offer a $1,000 par value 15-year maturity bond with a coupon interest rate that changes every five years. The coupon rate for the first five years is 10 percent, 10.75 percent for the next five years, and 11.5 percent for the final five years.
If you require an 11 percent rate of return on a bond of this quality and maturity, what is the maximum price you would pay for the bond? (Assume interest is paid annually at the end of each year.)