Required return on similar-risk bonds


Problem:

Calculate the value of a $1,000 bond which has 10% until maturity and pays quarterly interest at an annual coupon rate of 12%. The required return on similar-risk bonds is 20%.

A. $845.66

B $2,201.08

C $835.45

D $656.77

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Accounting Basics: Required return on similar-risk bonds
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