Question

d.) Value of bond determined – By finding the PV of the bond’s expected coupon payments...

d.) Value of bond determined – By finding the PV of the bond’s expected coupon payments at the bond’s required rate of return.

10 N

100 PMT

1000 FV

10 I/Y      CPT   PV=$1000.00

e.) 1. 10 N

        100 PMT

      1000 FV

         13 I/Y    CPT   PV= $837.2127 so $837.21

Selling at a Discount.

     2.    10 N

       100 PMT

    1000 FV

          7 I/Y   CPT   PV = $1210.7074 or $1210.71

Selling at a Premium.

Are these answers correct in the mimi case problem d. and e. or is PMT supposed to be a negative for the calculation? Thank you

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Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

SOLVED WITH BA II PLUS CALCULATOR

BOTH PMT AND FV SHOULD HAVE NEGATIVE SIGN

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