Flower Valley Company bonds have a 14.87 percent coupon rate. Interest is paid semiannually. The bonds have a par value of $1,000 and will mature in 5 years from now. Compute the value of Flower Valley Company bonds if investors’ required rate of return is 9.39 percent. Round the answer to two decimal places.
|Value of Flower Valley Company bonds is||$ 1,214.74|
|Value of Flower Valley Company bonds||=||=-pv(rate,nper,pmt,fv)|
|rate||Required rate of return||=||9.39%/2||=||0.04695|
|nper||Number of period||=||5*2||=||10|
|pmt||Semi annual coupon paid in cash||=||1000*14.87%*6/12||=||$ 74.35|
|fv||Par Value||=||=||$ 1,000.00|
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