ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Step 1
Given
The face value of the bond is $1000
The coupon rate is 6% with quarterly payment
The bond matures in 6 years
We have to calculate the price of the bond if the decried rate of return is 12% compounded quarterly
The price of the bond is the present value of all coupon payments and face value.
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