Sub: Finance Topic: Bond Valuation
Calculation of current price of the bond.
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DAH, Inc. has issued a 12% bond that is to mature in 9 years. The bond had a $1,000 par value and
interest is due to be paid semi-annually. If your required rate of return is 10%, what price would you
be willing to pay for the bond?
Since the coupon payment is semiannual, so n = Years to Maturity * 2
Number of coupon payments (n) 18