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Bond valuation   Semiannual interest   Find the value of a bond maturing in 6 ​years, with a...

Bond valuation   Semiannual interest   Find the value of a bond maturing in 6 ​years, with a ​$1,000 par value and a coupon interest rate of 11​% ​(5.5​% paid​ semiannually) if the required return on​ similar-risk bonds is 14​% annual interest (7 % paid​ semiannually). The present value of the bond is ​$             ​(Round to the nearest​ cent.)

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Answer #1

Bond's value is calculated using the PV function as follows:-

=PV(rate,nper,pmt,fv)

=PV(14%/2,6*2,11%/2*1000,1000)

=880.86

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