Explore BrainMass

Explore BrainMass

    Estimating the fair value of a bond

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

    Find the value of a semiannual coupon bond with a face value of $1000, with an annual coupon rate of 15 percent, and with 24 years remaining until maturity, and with an annual interest rate (Yield to Maturity) of 17.48 percent. Of the options below, which one is correct?

    © BrainMass Inc. brainmass.com June 4, 2020, 2:36 am ad1c9bdddf
    https://brainmass.com/business/bond-valuation/steps-estimating-fair-value-bond-468347

    Solution Preview

    The Fair value of a bond is given by

    Fair value of bond =Present value of annual coupon payments + Present ...

    Solution Summary

    Solution describes the steps to estimate the value of a coupon paying bond.

    $2.19

    ADVERTISEMENT