It is the year 2048, and the US government needs serious amounts of cash to repair its
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It is the year 2048, and the US government needs serious amounts of cash to repair its failling infrastructure. It is issuing $1 Trillion worth of 50 year maturity Treasury bonds with a coupon rate of 20%. You expect intrest rates to drop over the next 50 years so your annual required rate of return is 12%. What is the maximum price you would pay for one bond to achieve your target rate of return? (use semiannual compounding).
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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