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Celtic Airlines Inc has just sold $40,000,000 worth of bonds to investors. The bonds were sold at par, carry an annual coupon of 9% and will mature in ten years. Ten years ago, Gaelic Airlines sold $30,000,000 worth of bonds with twenty years until maturity, also at par. These bonds carry a coupon rate of 7% with coupons paid semi-annually. What is the current price of Gaelic Airlines bonds? (Both Celtic and Gaelic bonds have a $1,000 face value. You can assume that the bonds are equivalent)

Financial Management, Finance

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