Problem:
Grossnickle Corporation issued 20-year, noncallable, 7.9% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 5.5%.
Required:
Question: What is the current price of the bonds, given that they now have 19 years to maturity?
- 1598.23,
- 1278.58,
- 1214.55,
- 1559.36,
- 1240.23
Note: Please answer in proper manner and show all computations