Problemleggio corporation issued 15-year 6 annual coupon, Ask an Expert

Accounting

Problem:

Leggio Corporation issued 15-year, 6% annual coupon bonds at their par value of $1,000 one year ago. One year later the market interest rate on these bonds had dropped to 5%.

Required:

Question: What is the new price of the bonds, given that they now have 14 years to maturity?

Select the correct answer.

$1,097.01
$1,100.35
$1,098.62
$1,098.99
$1,099.53

Note: Please provide through step by step calculations.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166840

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