Macys has a level-coupon bond outstanding with 9000 coupon, Ask an Expert

Finance

Macy's has a level-coupon bond outstanding with $90.00 coupon interest payment, payable annually. The bond has 20 years to maturity, and similar corporate bonds currently yield 7%.

By a prior agreement with bondholders Macy's will skip the coupon payments in years 8,9, and 10.

These coupons will be repaid without interest at maturity. What is the value of the bond?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92809941

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