# Value of a bond

Not what you're looking for?

Calculate the value of a $1,000 bond which has 10 years until maturity and pays quarterly interest at an annual coupon rate of 12%. The required return on similar-risk bonds is 20%.

A. $845.66

B $2,201.08

C $835.45

D $656.77

##### Purchase this Solution

##### Solution Summary

Value of a bond has been calculated by discounting the cash flows from the bond.

##### Solution Preview

Calculate the value of a $1,000 bond which has 10 years until maturity and pays quarterly interest at an annual coupon rate of 12%. The required return on similar-risk bonds is 20%.

A. $845.66

B $2,201.08

C $835.45

D $656.77

Answer: D $656.77

The calculations are shown below

Calculating Value of a bond

To calculate the price of ...

##### Purchase this Solution

##### Free BrainMass Quizzes

##### Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

##### Learning Lean

This quiz will help you understand the basic concepts of Lean.

##### Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

##### Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

##### Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.