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California Corporation offers 5 percent coupon bonds with semiannual payments and a yield to maturity of...

California Corporation offers 5 percent coupon bonds with semiannual payments and a yield to maturity of 5 percent. The bonds mature in 10 years. What is the market price per bond if the face value is $1,000?  

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Answer #1

Since the YTM is equal to coupon rate, market price of the bond is equal to its face value of $1,000.

Illustrated as follows, using PV function of Excel.

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