A $1,000 par value bond was originally issued with a 30 year maturity and a 9% coupon rate. 8 years have passed since the bond was issued and the bond now has 22 years left until maturity. If an investor has a required return of 6%, how much should they pay for this bond?

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.