What is present value of the par value

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Alton needs a yield of atleast 9.75% on any investment he makes to achieve his goals. He asked you to check if this bond he was offered meets that criteria. The bond has a maturity value of $7,000 in 10 years. It pays Monthly coupons at a rate of 6%. It is compounded Monthly. Alton has been offered the bond at a price of $4,794.5.

What is Present Value of the Par Value? (Do not include PMT)

What is the Coupon Payment?

Find the PV of the Coupon Payment? (Do not include PV)

What is the maximum price Alton will pay for the bond? (Check your Answers for Question 1 and  Question 3. Do they add to this answer?)

Should Alton buy the bond?

Yes

No

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Reference no: EM132154562

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