Return to the facts of problem 58. Assume that Maysa bought $5,000 par value of Rondo Corporation

Question:

Return to the facts of problem 58. Assume that Maysa bought $5,000 of Rondo bonds for $4,500. The bonds pay 8% interest annually. Three years later, the price of the bonds has increased to $6,200. Maysa can purchase municipal bonds yielding 5.5%. Should she sell the Rondo bonds and buy the municipal bonds?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...