What must be the price of a $5,000 bond with a 7% coupon rate, semiannual coupons, and eight years to maturity if it has a yield to maturity of 11% APR? OA. $3,954 OB. $4,745 OC. $3,163 OD. $5,535

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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.