Problem:
The Morgan Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $800 every six months over the subsequent eight years, and finally pays $1,000 every six months over the last six years. Bond N also has a face value of $30,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond.
Required:
Question: If the required return on both these bonds is 8 percent compounded semiannually, what is the current price of Bond M? Of Bond N?
Note: Please show guided help with steps and answer.