If the bond offers quarterly coupon payments

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Reference no: EM132042089

You are a trader from Fortress Investments, and your boss tells you: “Price this 30 year bond that they are offering us, having an 8.75% coupon rate, and Par Value (i.e. Face Value) of $1,000. The market rate is 3.25%. If the bond offers quarterly coupon payments, what should we pay for this bond today?” – Assume no transaction costs. (Hint: Use Excel’s PV function, and the annuity discounting formula for pricing this bond – please show all steps as.

Reference no: EM132042089

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