Problem 10-6 (Algo) Bond value [LO10-3] Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 11 percent annual interest. The current yield to maturity on such bonds in the market is 13 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds for these maturity dates: Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual. a. 25 years b. 20 years c. 2 year Bond Price

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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.