Question

# Calculate the fair present values of the following bonds, all of which pay interest semiannually, have...

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of \$1,000, have 10 years remaining to maturity, and have a required rate of return of 10 percent. The bond has a 5 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) The bond has a 7 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) The bond has a 10 percent coupon rate. (Do not round intermediate calculations.)

a). To find the current bond price, we need to put the following values in the financial calculator:

 INPUT 10x2=20 10/2=5 (5%/2)x1,000=25 1,000 TVM N I/Y PV PMT FV OUTPUT -688.44

Hence, Current Bond Price = \$688.44

b). To find the current bond price, we need to put the following values in the financial calculator:

 INPUT 10x2=20 10/2=5 (7%/2)x1,000=35 1,000 TVM N I/Y PV PMT FV OUTPUT -813.07

Hence, Current Bond Price = \$813.07

c). To find the current bond price, we need to put the following values in the financial calculator:

 INPUT 10x2=20 10/2=5 (10%/2)x1,000=50 1,000 TVM N I/Y PV PMT FV OUTPUT -1,000

Hence, Current Bond Price = \$1,000

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