Question

Blossom, Inc., has issued a three-year bond that pays a coupon rate of 7.8 percent. Coupon...

Blossom, Inc., has issued a three-year bond that pays a coupon rate of 7.8 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.2 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)

Homework Answers

Answer #1

It is assumed that the Face Value of the bond is $1,000.

Market value = $1,100.49 calculated using PV function of Excel as follows:

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