Bond n also has a face value of 20000 and a maturity of 20


Las Paletas Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $1,300 every six months over the subsequent eight years, and finally pays $1,600 every six months over the last six years. Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 8 percent compounded semiannually.

What is the current price of bond M and bond N?

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Finance Basics: Bond n also has a face value of 20000 and a maturity of 20
Reference No:- TGS0603963

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