What is the present value of the bond if it pays annual


Consider an 8-year 5% coupon bond that pays a $1,000 par value at maturity. Assume 6.4% to be the approriate disount rate.

1) What is the present value of the bond if it pays annual coupon?

2 )What is the present value of the bond if it pays semi-annual coupons?

3) Now assume that the bond is perpetual.What is the present value of the bond if it pays the same annual coupons forever? With steps please.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the present value of the bond if it pays annual
Reference No:- TGS02353971

Expected delivery within 24 Hours