Southern Communications will issue 30-year, semiannual bonds with an 8.0% coupon rate and a $1,000 par value. Bonds of similar risk and maturity are currently selling to yield 7.0% in the market place
What is the market price of one of the firm's new bonds? Use a financial calculator to determine your answer.
A) $1,000.00
B) $1,124.72
C) $886.88
D) $1,124.09
Answer: B
Explanation: B)
Mode: PY = 2; C/Y = 2
Input: 60 7.0 ? -40 -1,000
Key: N I/Y PV PMT FV
CPT: 1,124.72
Business
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