Problem:
A firm has an issue of $1000 par value bonds with a 12 percent coupon. The issue pays interest annually and has 10 years remaining to its maturity date.
Required:
Question: If bonds of the same risk are currently earning 8 percent, what is the price of the bond?
- $1,000.00
- $805.21
- $851.53
- $1,268.40
Note: Please provide full description.