Question details

FIN515_Homework3
$ 15.00

Jackson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds?

 

VB = INT*r*[1 -(1+rd)-n]/i + M*(1+rd)-n

INT = par value
M= maturity value
r = coupon rate per coupon payment period
rd= effective interest rate per coupon payment period
n = number of coupon payments remaining

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