Question

(TCO D) A bond has 5 years to maturity and has a YTM of 8%. Its...

(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)

Homework Answers

Answer #1
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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