Due to numerous lawsuits, a major chemical manufacturer has recently experienced

Question

Due to numerous lawsuits, a major chemical manufacturer has recently experienced a market reevaluation. The firm has 15 year, 8% semiannual coupon bonds. The required nominal rate on this debt has now risen to 16%. What is the current value of this bond? Due to numerous lawsuits, a major chemical manufacturer has recently experienced a market reevaluation. The firm has 15 year, 8% semiannual coupon bonds. The required nominal rate on this debt has now risen to 16%. What is the current value of this bond?

Explanation / Answer

We will get $549.69 (Answer) from using this online calculator for Bond Valuation

http://finance.thinkanddone.com/online-n...

And using MS Excel PV function

=PV(16%/2,15*2,1000*8%/2,1000)
($549.69) (Answer)

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