(TCO D) A bond has 5 years to maturity and has a YTM of 8%. Its par value is $5,000. Its semiannual coupons are $250. What is the bonds current market price? (Show workings in Excel please)
Par Value | fv | = | $ 5,000 | ||||||
Maturity | nper | = | 5*2 | = | 10 | ||||
(Number of periods to mature) | |||||||||
Coupon amount | pmt | = | $ 250 | ||||||
Discount rate | rate | = | 8%*1/2 | = | 4% | ||||
Price of Bond is the present value (pv) of cash flows from bond. | |||||||||
Price of Bond | = | =-pv(rate,nper,pmt,fv) | |||||||
= | $ 5,405.54 | ||||||||
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