Price of the annual coupon bond


Question: Wald Corporation has outstanding bonds with a six year maturity, $1,000 par value, & seven percent coupon paid semiyearly [3.5 percent each 6 months], & those bonds sells at their par value. Wald has another bond with the same risk, maturity, & par value, but this second bond pays a seven percent annual coupon. Determine the price of the annual coupon bond? Neither bond is callable  

[A] 1,002.26

[B] 1,008.30

[C] 994.18

[D] 998.56

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Finance Basics: Price of the annual coupon bond
Reference No:- TGS016194

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