Two years ago phutki corp issued a 1000 par value 11, Ask an Expert

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Two years ago, Phutki Corp. issued a $1,000 par value, 11 percent (annual payment) coupon bond. At the time the bond was issued it had 15 years to maturity. Currently this bond is selling for $1,000 in the bond market. Phutki Corp. is now planning to issue a $1,000 par value bond with a coupon rate of 9 percent (semi-annual payments) that will mature 30 years from today. Assuming that the riskiness of the new bond is the same as the previous bond (i.e., the YTM on the new bond is equal to the current YTM on the previous bond), how much will investor's pay for this new bond?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92093231

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