Find the market value of the bonds

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Cox Media Corporation pays an 11 percent coupon rate on debentures that are due in 25 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1,160. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a. Find the market value of the bonds using semiannual analysis. (Ignore the call price in your answer. Do not round intermediate calculations and round your answer to 2 decimal places.)

b. Do you think the bonds will sell for the price you arrived at in part a?

Multiple choice

Yes

No

Reference no: EM133075064

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