Determine the price of a $1 million bond issue under each of the following independent assumptions:
|
Maturity |
Interest Paid |
Stated Rate |
Effective (Market) Rate |
|
|
1 |
10 years |
annually |
10% |
12% |
|
2 |
10 years |
semianually |
10% |
12% |
|
3 |
10 years |
semianually |
12% |
10% |
|
4 |
20 years |
semianually |
12% |
10% |
|
5 |
20 years |
semianually |
12% |
12% |