Broker quotes bond at $1180, $1000 par value bond pays 14 percent interest, has 25 years until maturity. Current yield to maturity is 12 percent. Compute new price of bond, is it overpaid in marketplace?© BrainMass Inc. brainmass.com October 10, 2019, 1:39 am ad1c9bdddf
The price of the bond should be the present value of interest and the principal. The annual interest is $140 and is an annuity and so we ...
The solution explains how to determine the price of a bond.