Question

Please answer with specific excel formulas to be used, not just the answer. For example: PV(.085,8,5000,1000,0)

as well as specific cell references.

Answer 1

37 38 39 40 41 Bond 1 Bond 2 Bond 3 Bond 4 Bond 5 Years to maturity Annual Coupon Rate Coupon PMT Par value YTM Price 15 6.3% 1,125,000 18,000,000 6.34% $17,846,098.73 20 21% 570,625 27,500,000 2.06% $27,555,870.51 40 4.6% 1,380,000 30,000,000 4.48% $30,692,529.01 0.0% 3.8% 815,625 21,750,000 3.83% $21,388,811.21 10,000 5.80% $5,690.41 43 PV(C42,C38,C40,C41,0)* PV(D42,D38,D40,D41,0)*-1 PV(E42,E38,E40, E41,0)*1 PV(F42,F38,F40,F41,0)*-1 PV(G42,G38,G40,G41,0)*-1 45 46 1) 47 2) 48 3) 49 4) 50 5) 51 52 53 54 In the first case the interest rate ,YTM has been divided by 2 as the interest is paid semiannually and years to maturity rate has been multiplied by 2 In the second case as the interest is paid annually therefore there is no change in interest rate and YTM and number of years In the third case the interest rate ,YTM has been divided by 4 as the interest is paid Quarterly and years to maturity rate has been multiplied by 4 In the fourth case the interest rate ,YTM has been divided by 2 as the interest is paid semiannually and years to maturity rate has been multiplied by 2 In the last case there has been no change in interest rate ,YTM as it has been assumed as annually Stated Coupon payment Bond Proeeds at issuance Bond Price Quotation 815,625 21,750,000 $21,388,811.21 1,125,000 18,000,000 $17,846,098.73 570,625 27,500,000 $27,555,870.51 1,380,000 30,000,000 $30,692,529.01 10,000 5,690.41 56