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# Calculate bond value today

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Two-years ago, Trans-Atlantic Airlines sold a \$250 million bond issue to finance the purchase of new jet airliners. These bonds were issued in \$1000 denominations with an original maturity of 12 years and a coupon rate of 12%. Determine the value today of one of these bonds to an investor who requires a 14% rate of return on these securities.

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#### Solution Summary

The expert calculates the bond value for today using financial management.

\$2.19
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One year ago a \$1000 face value 6% coupon bond was selling for \$918.93. Since then, the market return decreased by two percentage points. The bond pays interest semiannually and now has four years to maturity. The bond's price today is?

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