Gonzalez electric company has outstanding a 10 percent bond, Ask an Expert

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Gonzalez Electric Company has outstanding a 10 percent bond issue with a face value of $1,000 per bond and three years to maturity. Interest is payable annually. The bonds are privately held by Suresafe Fire Insurance Company. Suresafe wishes to sell the bonds, and is negotiating with another party.

It estimates that, in current market conditions, the bonds should provide a (nominal annual) return of 14 percent.

What price per bond should Suresafe be able to realize on the sale?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91956520

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