The McKeegan Corporation has two different bonds currently outstanding. Bond M has a face value of $29,500 and matures in 24 years. The bond makes no payments for the first 7 years, then pays $2,100 every six months over the subsequent 10 years, and finally pays $2,700 every six months over the last 7 years. Bond N also has a face value of $29,500 and a maturity of 24 years; it makes no coupon payments over the life of the bond. If the required return on both these bonds is 8 percent compounded semiannually, the current price of Bonds M and N is??
The answer is 19,018.78 but I would like to know how would one get the answer with a financial calculator?
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28,487.32 is the answer, Sorry.
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