Solve using excel SHOES "R" US bonds are currently selling for $1200. They pay a semi-annual...

Question

Question

Solve using excel

SHOES "R" US bonds are currently selling for $1200. They pay a semi-annual dividend at a stated 7.75% annual coupon rate.

The bond matures in seven and one half years and promises a $1000 par value.

1. What is the semi-annual coupon payment of this bond?

2. What is the yield to maturity for this bond?

business finance

Answer 1

Answer #1

1.
Semi annual coupon payment of the bond=7.75%*1000/2=38.75

2.
Yield to maturity=RATE(7.5*2,38.75,-1200,1000)*2=4.570%

Answer 2

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