ABC Corp. wants to issue a fixed coupon bond. The firm has estimated that its cost of debt is 13%. It has decided to issue 15 year FCB. The annual coupon rate is 9.5%, paid semi-annually. What is the price of ABC Corp's bond? 729.47 759.07 771.47 719.17 735.47

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.