Cox Media Corporation pays a 10 percent coupon rate on debentures that are due in 20 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1,150. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

The correct answer will be "1197.93".

Step-by-step explanation:

According to the question:

Semi annual coupon:

=

=

Number of periods:

=

=

Semi annual YTM:

=

=

Now,

The market value of bond will be:

= PV of Coupons + PV of Par Value

On putting the values, we get

=

=

Note: percent = %

unpaid balance is : $149.99-$50 = $99.99 new balance = 149.99+2.62-50 = $102.61 finance charge = 99.99- 0.21/12= $1.75 new balance = 99.99+1.75 = $101.74 average daily balance method average daily balance= 3399.70/30 = $113.32 finance charge = $ 0.21/12ă—113.32 = $1.98 new balance = $149.99-50+1.98 = $101.97

well there are two answers for that.

1: you need 120 ones then that will equal up to 120.

2: you could also do one 100 and 2 tens.

those are the answers that i have thought of.