Valuing Bonds?Microhard has issued a bond with the following characteristics: Par: $1,000 Time to maturity: 23 years Coupon rate: 7 percent Semiannual payments Calculate the price of this bond if the YTM is 7 percent: ( I need to following information)
Settlement | |
Maturity | |
Rate | |
YTM | |
Redemption | |
Frequency | |
Basis | |
Bond Price | |
Multiply by 10 |
A coupon-bearing bond may be priced with the following formula:
where:
C = the periodic coupon payment
y = the yield to maturity (YTM)
F = the bond’s par or face value
t = time
T = the number of periods until the bond’s maturity date
P = 70* PVAF of 7% for 23 Years + 1070* PV of 7% in 23rd Year
= 789 + 226
= 1015
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