Zumwalt Corporation's Class S bonds have a 12-year maturity, $1,000 par value, and a 5.75% coupon paid semiannually (2.875% each 6 months), and those bonds sell at their par value. Zumwalt's Class A bonds have the same risk, maturity, and par value, but the A bonds pay a 5.75% annual coupon. Neither bond is callable. At what price should the annual payment bond sell?
The solution explains how to determine the price of a bond
Stock Valuation versus Bond Valuation
Why is stock valuation considerably less precise than bond valuation? Can you give at least two reasons. Would it be possible to provide some industry references?
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