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Madsen Motors's bonds have 10 years remaining to maturity. Interest is paid annually, they have a...

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Finance

Madsen Motors's bonds have 10 years remaining to maturity.Interest is paid annually, they have a $1,000 par value, the couponinterest rate is 11%, and the yield to maturity is 12%. What is thebond's current market price? Round your answer to the nearestcent.

Answer & Explanation Solved by verified expert
3.7 Ratings (413 Votes)
Current Market Price of the Bond The Current Market Price of the Bond is the Present Value of the Coupon Payments plus the Present Value of the face Value Face Value of the Bond    See Answer
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Transcribed Image Text

Madsen Motors's bonds have 10 years remaining to maturity.Interest is paid annually, they have a $1,000 par value, the couponinterest rate is 11%, and the yield to maturity is 12%. What is thebond's current market price? Round your answer to the nearestcent.

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