Silvia is thinking about investing money into a bond to diversify her investments. Company X issued 12 bonds at a face value of $19000 and a 8.0% nominal interest rate paid semiannually to raise capital for an upcoming factory expansion. The face value of the bond is $19000. The bond is a 15 year bond. As the bond was issued, the current nominal interest rate in the market is 6.5% compounded monthly. What is the maximum price Silvia should be pay for a single bond from company X?

Silvia is thinking about investing money into a bond to diversify her investments. Company X issued 12 bonds at a face value of $19000 and a 8.0% nominal interest rate paid semiannually to raise capital for an upcoming factory expansion. The face value of the bond is $19000. The bond is a 15 year bond. As the bond was issued, the current nominal interest rate in the market is 6.5% compounded monthly. What is the maximum price Silvia should be pay for a single bond from company X?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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