01-08-2015, 12:18 PM
I'm having trouble determining how to find the answer for this question. Any help would be appreciated. Thanks in advance!
"A bond with a par value of $1,000, a coupon rate of 5%, 3 years to maturity, and making annual payments, is worth how much if the current discount rate is 7%?"
The correct answer is $947.51. The answer key says to use the NPV equation.
"A bond with a par value of $1,000, a coupon rate of 5%, 3 years to maturity, and making annual payments, is worth how much if the current discount rate is 7%?"
The correct answer is $947.51. The answer key says to use the NPV equation.