Problem 7.06 – Price of Semiannual Payment Bonds

Fundamentals of Corporate Finance

Ross, Westerfield, and Jordan

13th Edition

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Consider a company that issued bonds with a certain number of years to maturity a year ago at a coupon rate. The bonds make semiannual payments and have a par value. If the yield to maturity (YTM) on these bonds is a specific percentage, determine the current price of the bond in dollars.

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