What is the value of a bond with coupon payments of $150 every six months, a final payment of $5,500 in 12 years, and a risk-premium of 8%?
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A. B. C. D. E.A
In order to take the present value of the coupon and principal payments, one must know the required rate of return on the bond. The required rate of return is equal to the risk-free rate plus the risk premium. The risk-free rate is not given, so there is not enough information to answer the question.