To finance a new line of product, the Tangshan Toys has issued a bond with a par value of $1,000, coupon rate of 8 percent, and maturity of 30 years. Compute the price of the bond if the opportunity cost is 11 percent
What will be an ideal response?
Coupon payment = 1,000 × 0.08 = $80
Using financial calculator: PMT= 80, I=11, N=30, FV=1000, CPT PV= $739.19
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