Explore BrainMass

Explore BrainMass

    Calculate selling price of bonds

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

    A firm has an issue of $1000 par value bonds with a 12% stated interest rate outstanding. The issue pays interest annually and has 10 years remaining to its maturity date. If bonds of similar risk are currently earning 8%, how much will the firm's bond sell for?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:29 pm ad1c9bdddf

    Solution Preview

    The bonds would sell for the present value of interest and principal. The annual interest is $1,000 X 12%=120, principal amount is $1,000, years to maturity ...

    Solution Summary

    The solution explains how to calculate the selling price of bonds