In this assignment, we would like to determine the present value of the bond.

QUESTION

Conside a bond, maturing in $10$ years and having a coupon rate of $8$ percent. The par value is $$1,000.$ Investors consider $10$ percent to be an appropriate required rate of return in view of therisk level associated with the bond. What is the present value of the bond?

Note:

The PVIFA $(10\%,10$ years is $6\mathrm{.}1446)$

The PVIF $(10\%,10$ years is $0\mathrm{.}3855)$