Explore BrainMass

Explore BrainMass

    Calculating cash flow and price of bonds (based on varying discount rates)

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

    1. What is the cash flow of a 6% coupon bond that pays interest annually, matures in 7 years, and has a principle of $1,000?

    2. Assuming a discount rate of 8%, what is the price of this bond?

    3. Assuming a discount rate of 8.5%, what is the price of the bond?

    4. Assuming a discount rate of 7.5%, what is the price of the bond?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:18 pm ad1c9bdddf
    https://brainmass.com/business/discounted-cash-flows-model/calculating-cash-flow-and-price-of-bonds-based-on-varying-discount-rates-55194

    Solution Summary

    You will find the answer to this puzzling question inside...

    $2.19

    ADVERTISEMENT