Question

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?

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