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