Problemmorgan robbins a private investor would like to, Ask an Expert

Accounting

Problem:

Morgan Robbins, a private investor, would like to purchase a bond that has a par value of $1,000, pays $80 at the end of each year in coupon payments, and has 10 years remaining until maturity.

Required:

Question: If the prevailing annualized yield on other bonds with similar characteristics is 6 percent, how much will Mr. Robbins pay for the bond?

A) $1,000.00

B) $1,147.20

C) $856.80

D) none of these

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168131

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