Compute the bond expected rate of return

Reference no: EM13820499

High Tech Inc issued a $1,000 par value bond that pays a 10 percent interest annually. The bond matures in 15 years and is currently selling at $1,500. Your required rate of return is 8 percent.

Required:

Compute the bond's expected rate of return.
Determine the value of the bond to you, given your required rate of return.
If the required rate of return is 4.00%, would the bond be attractive to you at its current selling price of $1,500? Why?

Reference no: EM13820499

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