Answered: General Electric 30-year bonds have a…

General Electric 30-year bonds have a 7.5% annual coupon rate and a par value of $10,000. If their required rate of return is 6.25% per year, what should the price of their bonds be?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 4MC

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Question

Current price of bond

General Electric 30-year bonds have a 7.5%
annual coupon rate and a par value of $10,000.
If their required rate of return is 6.25% per
year, what should the price of their bonds be?

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