Question: Pullman Corp issued 10-year bonds four years ago with a coupon rate of 9.375 percent. At the time of issue, the bonds sold at par.

Pullman Corp issued 10-year bonds four years ago with a coupon rate of 9.375 percent. At the time of issue, the bonds sold at par. Today bonds of similar risk and maturity must pay an annual coupon of 6.25 percent to sell at par value. Assuming semiannual coupon payments, what will be the current market price of the firm’s bonds?

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Years to maturity n 6 Coupon rate C 9375 Semiannual coupon 1000 00937... View full answer

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