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BOND VALUATION Callaghan’s Motors’ bonds have 15 years remaining to maturity. Interest is paid semi-annually, they...

  1. BOND VALUATION Callaghan’s Motors’ bonds have 15 years remaining to maturity. Interest is paid semi-annually, they have a $1,000 par value, the coupon interest rate is 9%, and the yield to maturity is 8%. What is the bond’s current market price?
  2. BOND VALUATION Nungesser Corporation’s outstanding bonds have a $1,000 par value, a 9% semiannual coupon, 8 years to maturity, and an 8.5% YTM. What is the bond’s price?
  3. BOND VALUATION and YIELD TO MATURITY Suppose a 10-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading for $1034.74. What is the bond’s yield to maturity? If the bond’s yield to maturity changes to 9%, what will the bond’s price be?

USING FINANCE CALCULATOR (but showing what is PV,FV,PMT, I/Y AND N

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Answer #1

1)

I/Y=Rate, N=Nper

Hence bond’s current market price is $1086.46

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