Twenty-five-year B-rated bonds of Katz Copying Machines were initially issued at

Question

Twenty-five-year B-rated bonds of Katz Copying Machines were initially issued at par with a 12 percent yield. After 10 years the bonds have been upgraded to Aa2. Such bonds are currently yielding 10 percent. The bond has a par value of $1,000.

Determine the price of the bonds with 15 years remaining to maturity.(Round "PV Factor" to 3 decimal places and final answer to 2 decimal places. Omit the "$" sign in your response.)

Twenty-five-year B-rated bonds of Katz Copying Machines were initially issued at par with a 12 percent yield. After 10 years the bonds have been upgraded to Aa2. Such bonds are currently yielding 10 percent. The bond has a par value of $1,000.

Determine the price of the bonds with 15 years remaining to maturity.(Round "PV Factor" to 3 decimal places and final answer to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

it has 12% of intitial coupon rate.
10% of current yield to maturity
so the 15 years of remaing maturity is around $ 1,153.32

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