Endicott Enterprises Inc.has issued 30-year semiannual coupon bonds with a face value of $1,000.If the annual coupon rate is 14% and the current yield to maturity is 8%,what is the firm's current price per bond?

Question

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The bond's price is calculated using the present value of its future cash flows, which include semiannual coupon payments and the face value at maturity. Given the annual coupon rate of 14%, the semiannual coupon payment is $70. The yield to maturity is 8% annually, or 4% semiannually. Using these values in the bond pricing formula, the current price per bond is approximately $1,678.70.