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# Present Value/ Value calculation for Allied Signal Corp.

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Consider Allied Signal Corporation's 9 7/8 percent bonds that mature on June 1, 2010. Assume that the interest on these bonds is paid and compounded annually. Determine the value of a \$1,000 denomination Allied Signal Corporation bond as of June 1, 2004, to an investor who holds the bond until maturity and whose required rate of return is:

A. 7 percent

B. 9 percent

C. 11 percent

D. What would be the value of the Allied Signal Corporation bonds at an 8 percent required rate of return if the interest rate were paid and compounded semianually?

#### Solution Preview

To solve the problem, search the internet for an online calculator to calculate or use a financial calculator. I am using a financial calculator for the solution.

First, Set up known facts:
- Future Value = ...

#### Solution Summary

The solution solves and finds the present value of Allied Signal bonds at differing rates of return.

\$2.19