Question

Ryngaert Inc. recently issued noncallable bonds that mature in 15 years. They have a par value...

Ryngaert Inc. recently issued noncallable bonds that mature in 15 years. They have a par value of $1,000 and an annual coupon of 5.7%. If the current market interest rate is 7.7%, at what price should the bonds sell?

Homework Answers

Answer #1

Value of Bond =

Where r is the discounting rate of a compounding period i.e. 7.7%

And n is the no of Compounding periods 15 years

Coupon 5.7%

=

= 469.956114469 + 328.67331905

= $ 825.63

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