You have an 10% semiannual pay bond with a face vahe 01 $1,000 that matters in...

Question

Question

business accounting

Answer 1

Answer #1

SOL:

FACE VALUE=1000

CUOPEN=(10%/2)*1000=50 [SEMI ANNUAL PAYABLE]

TIME=8*2=16 PERIOD

YIELD=11%/2=5.5%

Price of the Bond = 1 1 (1+r) Coupon * MaturityValue + (1 + r) 7

=50*{1-(1/(1.055)^16)0.055}+{1000/(1.055)^16}

=50*10.46+424.62

=$947.62

IF ANY DOUBT PLEASE MENTION N COMMENT

Answer 2

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