Heathrow Sparkling is considering a bond investment in LS7 Airlines. The $1,000 par value bonds have a quoted annual interest rate of 10.8 percent and the interest is paid semi-annually. The yield to maturity on the bonds is 12.8 percent annual interest. There are six years to maturity. Compute the price of the bonds based on semi-annual analysis.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Heathrow Sparkling is considering a bond investment in LS7 Airlines. The $1,000
par value bonds have a quoted annual interest rate of 10.8 percent and the
interest is paid semi - annually. The yield to maturity on the bonds is 12.8 percent
annual interest. There are six years to maturity. Compute the price of the bonds
based on semi-annual analysis.
Transcribed Image Text:Heathrow Sparkling is considering a bond investment in LS7 Airlines. The $1,000 par value bonds have a quoted annual interest rate of 10.8 percent and the interest is paid semi - annually. The yield to maturity on the bonds is 12.8 percent annual interest. There are six years to maturity. Compute the price of the bonds based on semi-annual analysis.
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