Explore BrainMass

Explore BrainMass

    Bond Price

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A 25-year, $1,000 par value bond has an 8.5% annual coupon. The bond currently sells for $875. If the yield to maturity remains at its current rate, what will the price be 5 years from now?

    a. $839.31
    b. $860.83
    c. $882.90
    d. $904.97
    e. $927.60

    © BrainMass Inc. brainmass.com June 3, 2020, 10:32 pm ad1c9bdddf
    https://brainmass.com/business/bond-valuation/236540

    Solution Preview

    We first find the current YTM. YTM is the discounting rate that will make the present value of ...

    Solution Summary

    The solution explains how to calculate the bond value in 5 years.

    $2.19

    ADVERTISEMENT