The bonds of Apex Corporations have a par value of $10,000 each and an annual required rate of return of 10%. The bonds make quarterly coupon payments at an annual rate of 6% and have two years remaining until maturity. The current market price of each bond is closest to: $9,306. $10,749. $9,283.
The correct answer is C. I got it right, but I am a little bit confused about the process of calculation.
If I use financial calaulator : n=8 , i=2.5, pmt=150, FV=10,000 , I got PV=7,131, which is the wrong answer,
But if I use the NPV on financial calculator , I can get the right answer : 9,283
Can I know why ? Why I can’t use the first approach to come up with answer