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Jackson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value Answer

Jackson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds?

Ans:

Years to Maturity 12
Annual Payment $80
Par value $1,000
Going rate, rd 9%
   
Value of bond = $928.39

Current market price of these bonds = $ 928.39

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