Mills Company, a large defense contractor, on January 1st, 2004, issued a 10% coupon interest rate, 10 year bond with a $1000par value that pays interests semi-annually. Investors who buy this bond receive the contractual right to two cash flows: (1) $100 annual interest (2) $1000 par value at the end of the tenth year. Calculate the value of the bond.
Mills Company, a large defense contractor, on January 1st, 2004, issued a 10% coupon interest rate, 10 year bond with a $1000par value that pays interests semi-annually. Investors who buy this bond receive the contractual right to two cash flows: (1) $100 annual interest (2) $1000 par value at the end of the tenth year. Calculate the value of the bond.
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Mills Company, a large defense contractor,
on January 1st, 2004, issued a 10% coupon
interest rate , 10 year bond with a $1000par
value that pays interests semi-annually.
Investors who buy this bond receive the
contractual right to two cash flows: (1) $100
annual interest (2) $1000 par value at the end
of the tenth year. Calculate the value of the
bond.
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