Grossnickle Corporation: Current Price of Bonds
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Scenario: Grossnickle Corporation issued a 20-year, non-callable, 6.3% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 19 years to maturity?
$1,136.58
$950.79
$1,289.58
$1,049.15
$1,092.86
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Solution Summary
This solution explains how to calculate the current price of the bonds using a simple and easy to understand calculation and explanation. It is less than 50 words.
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The current price is the present value of interest and principal ...
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