What is the maximum price you would pay for bond

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Reference no: EM131945560

The Electro-Dynamo Company (EDC) is trying to raise funds to expand its production facilities by selling bonds. The bonds have 15 years to maturity, carry a coupon of 10%, pay interest semiannually, and have a par value of $1,000. You have some excess cash that is sitting in a bank CD (that means certificate of deposit, not compact disc) which pays 6%, compounded semiannually. Assuming that the security characteristics of the bond are satisfactory, what is the maximum price you would pay for this bond?

Reference no: EM131945560

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