Schermer, Inc. just issued a $5000 par value bond. The bond, which matures exactly 23 years from today, has a coupon rate of 4.88% (semi-annual payments). If the appropriate yield to maturity for this bond is 5.75%, what is the current price of the Schermer, Inc. bond?

Schermer, Inc. just issued a $5000 par value bond. The bond, which matures exactly 23 years from today, has a coupon rate of 4.88% (semi-annual payments). If the appropriate yield to maturity for this bond is 5.75%, what is the current price of the Schermer, Inc. 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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Question

Schermer, Inc. just issued a $5000 par value
bond. The bond, which matures exactly 23
years from today, has a coupon rate of 4.88%
(semi-annual payments). If the appropriate
yield to maturity for this bond is 5.75%, what
is the current price of the Schermer, Inc.
bond?

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