Please give me correct answer What is the present value of a$1,000 bond that pays an annualcoupon payment of $90 at the endof each of the next four years andthen matures at the end of year 4?Assume the market rate of interestis 8%.

Formula:PV = C * [(1 - (1 + r)^(-n)) / r] + FV / (1 + r)^n Where:PV is the present value C is the…

Answered: What is the present value of a $1,000…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 5MC

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What is the present value of a $1,000 bond that pays an annual coupon payment of $90 at the end of each of the next four years and then matures at the end of year 4? Assume the market rate of interest is 8%.