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The Double A's Corporation has two different bonds currently outstanding. Bond General Motors has a face value of $20,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $1,100 every six months over the subsequent eight years, and finally pays $1,400 every six months over the last six years. Bond Apple Inc. has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. If the required rate of return on both bonds is 7 percent compounded semi-annually, what is the difference in their current prices?

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Category:- Financial Management
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