What is the price of the bond

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Question - Once you understand the concepts of calculating the price of the bond, you could easily see the trend i.e. when MR>CR, MR<CR, and when MR=CR.

Try this scenario:

1. Mark Company issued 10 years, $1,000 face value bond with a coupon rate of 8%. Interest paid annually. The current market rate is 12%. What is the price of the bond?

2. Mark Company issued 10 years, $1,000 face value bond with a coupon rate of 8%. Interest paid annually. The current market rate is 6%. What is the price of the bond?

3. Mark Company issued 10 years, $1,000 face value bond with a coupon rate of 8%. Interest paid annually. The current market rate is 8%. What is the price of the bond?

Reference no: EM132947014

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