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Bonds

1. A corporate bond was issued 10 years ago with a 25-year maturity, 12% coupon paid semi-annually, and AAA rating. Today bonds with similar maturities and credit quality are being issued at par with 7.5% coupons.

Calculate the theoretical price of the bond, indicating your values for n, i, and PMT.

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1. A corporate bond was issued 10 years ago with a 25-year maturity, 12% coupon paid semi-annually, and AAA rating. Today bonds with similar maturities and credit quality are being issued at par with 7.5% coupons. ...

Solution Summary

This solution is comprised of a detailed explanation to calculate the theoretical price of the bond.

$2.19