Problema 10000 par value bond with coupons at 8 convertible, Ask an Expert

Finance

Problem:

A $10,000 par value bond with coupons at 8%, convertible semiannually, is being sold three years and four months before the bond matures. The bond is redeemable at $C, and purchase will yield 6% convertible semiannually to the buyer. The price of the bond was $5,640 three years and six months before maturity (immediately after the coupon payment).

Required:

Question: Calculate the market price of the bond, assuming compound interest throughout.

Note: Please show how to work it out.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163449

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