Compute the current price of the bond using an assumption

Reference no: EM133331734

Question: A $1,000 par value bond was issued 30 years ago at an 10 percent coupon rate. It currently has 15 years remaining to maturity. Interest rates on similar debt obligations are now 12 percent. (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answers to 2 decimal places.)

a. Compute the current price of the bond using an assumption of semiannual payments.

b. If Mr. Mitchell initially bought the bond at par value, what is his percentage loss (or gain)? (Input the amount as positive value.)

Reference no: EM133331734

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