Question

Kholdy enterprises' outstanding bonds mature in 6 years, have a par value of $1,000, and make an annual coupon payment of $60. the market yield on the bond is currently 10%. what is the bond's price?

Answer 1

You are given Kholdy enterprises' outstanding bonds that mature in 6 years with a par value of $1,000. You are also given the an annual coupon payment of $60. You are also given the market yield on the bond that is currently 10%. The bond's price is $825.79. What it can infer from Kholdy enterprises' is that the $825.79 is a discount bond since its price is less than $1,000, its par value.