Computing bond face value

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1. How much should a $1,000-face-value bonds sell for, assuming the following conditions:

- The bond pays a coupon of 11%

- The coupon payments are paid annually.

- The required rate of return on similar-risk investments is 9%.

- The bond matures in 15 years

2. How much should a $1,000-face-value bonds sell for, assuming the following conditions:

- The bond pays a coupon of 7%

- The coupon payments are paid semi-annually.

- The required rate of return on similar-risk investments is 7%.

- The bond matures in 10 years

Reference no: EM13115891

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