Explore BrainMass
Share

Market price of bond

A company's $500 million of 30-year bonds outstanding was issued at a coupon rate of 8%. On 5/1/03, two years after issuance, the market rate for bonds of similar characteristics falls to 5%. What should be the market price of the company's bonds on the bond market at 5/1/03?

a. 66.85
b. 100
c. 144.69
d. 146.12

© BrainMass Inc. brainmass.com June 21, 2018, 4:41 am ad1c9bdddf

Solution Preview

The market price would be the present value of interest and principal. ...

Solution Summary

The solution explains how to calculate the market price of bond.

$2.19