You are thinking about buying a bond that offers a coupon rate of 6% but with semi-annual coupon payments. The bond has exactly 7 years remaining to maturity. The face value of the bond is $1,000. Your required return is 8.16% per year. How much should you be willing to pay for this bond? 1,211.2625
Added by Joshua L.
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The bond has a coupon rate of 6%, which means it pays 6% of its face value in interest each year. Since the bond has semi-annual coupon payments, it pays 3% every 6 months. Show more…
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