Bond Valuation

[bdogg1229]

Wald Corporation has outstanding bonds with a 6 year maturity, $1,000 par value, and 7% coupon paid semianually (3.5% each 6 months), and those bonds sells at their par value. Wald 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? Neither bond is callable.

[spudqueen]

Sorry bdogg, but this is a UK based website (hence the .co.uk bit at the end of the web address) so I doubt that there will be anyone here who will be able to answer your question. I suggest you try and find a website based in your country (sorry, but with you using the $ sign I'm not sure where you are, USA, Canada, Australia................).

[factor-fiction]

Have any of you class mates got the same homework- you could ask to borrow their lecture notes.