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    clippermom's Avatar
    clippermom Posts: 1, Reputation: 1
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    #1

    Nov 6, 2012, 02:59 AM
    bond value formula example
    General Electric made a coupon payment yesterday on its 6.75% bonds that mature in 8.5 years. If the required return on these bonds is 8% APR, what should be the market price of these bonds?
    I just can't do this... please help!
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Nov 6, 2012, 04:49 AM
    First describe the cash flows remaining on this bond. Tell me what the coupon payments are (their amount, and when they'll be paid), and tell when the maturity amount is to be paid (assume they're $1,000 face amount bonds, and that they pay their coupons semi-annually).

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