A bond issued by Liberty, Inc. has a coupon rate of 8% and a face value of $1,000. The bond will mature in 2 years. The bond is currently selling in the market at a price of $950. A potential investor calculates that in order to earn her required return of 9%, the present value of the bond is $982. What is the most that the investor should be willing to pay for the bond?

Answer rating: 100% (QA)

The maximum price the investor should be willing to pay for the bond is 982 which is the presen... View the full answer