Question

Luxury properties offers bond with a coupon rate of 9.5% paid semiannually. The yield to maturity is 11.2% and the maturity date is 11 years from today. What is the market price of this bond if the face value is $1,000?

Solve using excel

Answer 1

Coupon Rate	9.50%
YTM	11.20%
Maturity	11
Payment	0.5	(Semi-Annually)
Face Value	1000
Time	Coupon Payment	Final Payment	Present Value
0.5	47.5		45.04
1	47.5		42.72
1.5	47.5		40.51
2	47.5		38.41
2.5	47.5		36.43
3	47.5		34.54
3.5	47.5		32.76
4	47.5		31.07
4.5	47.5		29.46
5	47.5		27.94
5.5	47.5		26.49
6	47.5		25.12
6.5	47.5		23.82
7	47.5		22.59
7.5	47.5		21.42
8	47.5		20.32
8.5	47.5		19.27
9	47.5		18.27
9.5	47.5		17.33
10	47.5		16.43
10.5	47.5		15.58
11	47.5	1000	325.84
		Market Price	911.36