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Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an...


Morin Companys bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The m
Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 6.7% on these bonds. What is the bond's price? $987.92 $1,215.14 $770.58 $1,155.86
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Answer #1

Information provided:

Par value= future value= $1,000

Time= 8 years

Annual coupon payment= $65

Yield to maturity= 6.7%

The price of the bond is calculated by computing the present value.

Enter the below in a financial calculator to compute the present value:

FV= 1,000

N= 8

PMT= 65

I/Y= 6.7

Press the CPT key and PV to compute the present value.

The value obtained is 987.92.

Therefore, the price of the bond is $987.92.

In case of any query, kindly comment on the solution.

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