Assume that Brady Corp.has an issue of 18-year $1,000 par value bonds that pay 7% interest,annually.Further assume that today's required rate of return on these bonds is 5%.How much would these bonds sell for today? Round off to the nearest $1.

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The bond's price can be calculated using the present value of its future cash flows, which include annual interest payments and the principal at maturity. Since the required rate of return (5%) is lower than the coupon rate (7%), the bond will sell at a premium. Calculating the present value of the interest payments and the principal, the bond's price is approximately $1,233.79.

Assume That Brady Corp