Question:
Lambert Corning, Inc. specializes in buying heavily undervalued bonds. To do that this firm mainly searches bonds, which are being trading at well below par value and have relatively longer period to maturity. He has his eye on a bond issued by King Co. The $1,000 par value bond provides 11 percent annual coupon rate and has 15 years remaining to maturity. The current yield to maturity on similar bonds is 10 percent. What is the current price of the bonds?