Solution Library

Calculation Of Market Price Of A Bond

Question

Minneapolis Health System has bonds outstanding that have four years remaining to maturity, a coupon interest rate of 9% paid annually and a $1000 par value.

a. What is the yield to maturity on the issue if the current market price is $829?
b. If the current market price is $1104?
c. Would you be willing to buy one of those bonds for $829 if you required a 12% rate of return on the issue? Explain you answer.

Summary

The question belongs to Finance and it discusses about calculating the current market price for an outstanding bond with 4 years to maturity.

Total Word Count 107

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Comments

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    Giuseppe

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