You have just purchased a 15-year, P1,000 par value bond. The coupon rate on this bondis nine percent (9%) annually, with interest being paid each six months. If you expect toearn a 12 percent market rate of return on this bond, how much did you pay for it?O P642.76O P793.53O P950.75O P875.38

The bond price can be calculated as the present value of bond cash flows.

Answered: You have just purchased a 15-year,…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 8P

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You have just purchased a 15-year, P1,000 par value bond. The coupon rate on this bond is nine percent (9%) annually, with interest being paid each six months. If you expect to earn a 12 percent market rate of return on this bond, how much did you pay for it? O P642.76 O P793.53 P950.75 O P875.38