Engineering Board Exam Reviewer · Bonds · easy
A P10,000 bond pays 8% annual coupon interest and matures in 5 years. If the prevailing yield rate is also 8%, find the price of the bond.
- P10,000
- P9,500
- P10,500
- P11,000
Answer
A. P10,000
Solution
When the coupon rate equals the yield rate, the bond sells at its face (par) value: P10,000.
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