Parrino, Fundamentals of Corporate Finance, 3e Gradebook ORION NEXTI Problem 8.3
ID: 2795153 • Letter: P
Question
Parrino, Fundamentals of Corporate Finance, 3e Gradebook ORION NEXTI Problem 8.3 Knight, Inc., has issued a three-year bond that pays a coupon rate of 6.34 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.63 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.) By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Question Attempts: 0 of 3 used SAVE FOR LATER Earn Maximum Points available only if you answer this question correctly in two attempts or less.Explanation / Answer
market value of the bond
=(1000*6.34%/2)*((1-(1+(4.63%/2))^(-3*2))/(4.63%/2))+1000/(1+(4.63%/2))^(3*2)
=1047.39
the above is answer