Question

Langford Co. issued 14-year bonds a year ago at a coupon rate of 7.8%. The bonds...

Langford Co. issued 14-year bonds a year ago at a coupon rate of 7.8%. The bonds make semiannual payments. If the YTM on these bonds is 6.1%, what is the current bond price? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Current bond price $

Homework Answers

Answer #1

Sol:

Face value (FV) = $1,000

Coupon rate = 7.8%,, Semiannual coupon rate = 7.8 / 2 = 3.9%

Semiannual Coupon payment (PMT) = 1000 x 3.9% = $39

Years to maturity (NPER) = 14 - 1 = 13 years, Semiannual = 13 x 2 = 26

Interest rate = 6.1%, Semiannual = 6.1 / 2 = 3.05%

To determine current bond price (PV) we can use PV function in excel:

FV

1,000

PMT

39

NPER

26

Rate

3.05%

PV

1,151.08

Therefore current bond price (PV) will be 1,151.08.

Working

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
App Store Co. issued 25-year bonds two years ago at a coupon rate of 4.70 percent....
App Store Co. issued 25-year bonds two years ago at a coupon rate of 4.70 percent. The bonds make semiannual payments.    Required: If the YTM on these bonds is 5.25 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Grohl Co. issued 17-year bonds a year ago at a coupon rate of 10 percent. The...
Grohl Co. issued 17-year bonds a year ago at a coupon rate of 10 percent. The bonds make semiannual payments. If the YTM on these bonds is 10 percent, what is the current bond price?
Grohl Co. issued 10-year bonds a year ago at a coupon rate of 8 percent. The...
Grohl Co. issued 10-year bonds a year ago at a coupon rate of 8 percent. The bonds make semiannual payments. If the YTM on these bonds is 11 percent, what is the current bond price?
Grohl Co. issued 18-year bonds a year ago at a coupon rate of 10 percent. The...
Grohl Co. issued 18-year bonds a year ago at a coupon rate of 10 percent. The bonds make semiannual payments. If the YTM on these bonds is 9 percent, what is the current bond price?
Grohl Co. issued 17-year bonds a year ago at a coupon rate of 10 percent. The...
Grohl Co. issued 17-year bonds a year ago at a coupon rate of 10 percent. The bonds make semiannual payments. If the YTM on these bonds is 11 percent, what is the current bond price?
Sqeekers Co. issued 10-year bonds a year ago at a coupon rate of 7.6 percent. The...
Sqeekers Co. issued 10-year bonds a year ago at a coupon rate of 7.6 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 5.9 percent, what is the current bond price?
Weismann Co. issued 6-year bonds a year ago at a coupon rate of 7 percent. The...
Weismann Co. issued 6-year bonds a year ago at a coupon rate of 7 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 10 percent, what is the current bond price?
Weismann Co. issued 18-year bonds a year ago at a coupon rate of 10 percent. The...
Weismann Co. issued 18-year bonds a year ago at a coupon rate of 10 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 10 percent, what is the current bond price?
Weismann Co. issued 11-year bonds a year ago at a coupon rate of 12 percent. The...
Weismann Co. issued 11-year bonds a year ago at a coupon rate of 12 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 11 percent, what is the current bond price?
Weismann Co. issued 11-year bonds a year ago at a coupon rate of 12 percent. The...
Weismann Co. issued 11-year bonds a year ago at a coupon rate of 12 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 11 percent, what is the current bond price?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT