Bond a pays annual coupons pays its next coupon in 1 year


Bond A pays annual coupons, pays its next coupon in 1 year, matures in 12 years, and has a face value of 1,000 dollars. Bond B pays semi-annual coupons, pays its next coupon in 6 months, matures in 13 years, and has a face value of 1,000 dollars. The two bonds have the same yield-to-maturity. Bond A has a coupon rate of 8.46 percent and is priced at 836.24 dollars. Bond B has a coupon rate of 7.72 percent. What is the price of bond B?

 

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Bond a pays annual coupons pays its next coupon in 1 year
Reference No:- TGS02784527

Expected delivery within 24 Hours