Bond price
October 6th, 2022
A company has outstanding bonds with a 6 year maturity, $1,000 par value and 7% coupon paid semiannually and those bonds sell at their par price. This same company has another bond with the same risk, maturity and par value but this second bond pays a 7% annual coupon. What is an estimate of the price of the annual coupon bond?
A. $994.18
B. $998.56
C. $1,002.26
D. $1,008.30
E. $1,015.89