A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells...
A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $825. If the yield to maturity remains at its current rate, what will the price be 5 years from now? a. $801.76 b. $626.38 c. $843.52 d. $835.17 e. $726.60
- A. a
- B. b
- C. c
- D. d
- E. e
Homework Answers
First YTM is calculated:
=RATE(25,8.5%*1000,-825,1000)
=10.50%
price of the bond is calculated using PV function:-
=PV(F12,20,8.5%*1000,1000)
=835.17
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