Question

soca co. offers a 9 percent coupon bond with semiannual payments and a yield to maturity...

soca co. offers a 9 percent coupon bond with semiannual payments and a yield to maturity of 7.50 percent. The bonds mature in 18 years. What is the market price of a $1,000 face value bond?

Homework Answers

Answer #1
Period Cash Flow Discounting Factor
[1/(1.0375^year)]
PV of Cash Flows
(cash flows*discounting factor)
1 45 0.963855422 43.37349398
2 45 0.929017274 41.80577733
3 45 0.895438336 40.29472513
4 45 0.863073095 38.83828929
5 45 0.831877682 37.4344957
6 45 0.801809814 36.08144164
7 45 0.772828737 34.77729314
8 45 0.744895168 33.52028255
9 45 0.717971246 32.30870607
10 45 0.692020478 31.14092151
11 45 0.66700769 30.01534604
12 45 0.642898978 28.93045401
13 45 0.619661666 27.88477495
14 45 0.597264256 26.87689152
15 45 0.575676391 25.90543761
16 45 0.554868811 24.96909649
17 45 0.534813312 24.06659903
18 45 0.51548271 23.19672195
19 45 0.496850805 22.35828622
20 45 0.478892342 21.55015539
21 45 0.46158298 20.77123411
22 45 0.444899258 20.02046662
23 45 0.428818562 19.29683529
24 45 0.413319096 18.59935932
25 45 0.398379852 17.92709332
26 45 0.38398058 17.27912609
27 45 0.370101764 16.65457936
28 45 0.356724591 16.05260662
29 45 0.343830932 15.47239192
30 45 0.331403307 14.91314884
31 45 0.319424875 14.37411936
32 45 0.307879397 13.85457288
33 45 0.296751226 13.35380518
34 45 0.286025278 12.87113753
35 45 0.275687015 12.40591569
36 45 0.265722424 11.9575091
36 1000 0.265722424 265.7224244
Price of the Bond =
Sum of PVs
1146.855515
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