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Calculate the value of a bond that matures in 19 years and has a $1,000 par...

Calculate the value of a bond that matures in 19 years and has a $1,000 par value. The Annual Coupon interest rate is 9 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. The Value of the bond is $(___). (Round to the nearest cent.)

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Answer #1

Face/Par Value of bond = $1000

Annual Coupon Bond = $1000*9%

= $90

No of years to maturity(n) = 19 years

YTM = 16%

Calculating the Market price of Bond:-

Price = $528.971 + $59.607

Price = $588.58

So,the current market price of bond is $588.58

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