What price will investors be willing to pay for the bond

Assignment Help Financial Management

Reference no: EM131059084

Xerox wants to issue bonds in order to take advantage of historically low interest rates. The bonds will have a 2.5% coupon rate (interest paid semiannually) and a maturity of 25 years.

A. If market interest rates are at 3% at the time the bonds are issued, what price will investors be willing to pay for the bond?

B. If the bonds sold for $1,050, what is the YTM on the bonds?

Label your answers "A" and "B"

Reference no: EM131059084

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