Using a Spreadsheet to Calculate Bond Values.

What is the value of a $1,000 bond with a 12-year maturity and an 8 percent coupon rate (paid semiannually) if the required rate of return is 5 percent, 6 percent, 8 percent, and 10 percent? (LG 3-2)

Face Value Number of Payments Periodic Coupon Payment, $

Required Return ⇒

The Bond Value Will Be

$1,000 12 × 2 = 24 1,000(0.08)/2 =40      5% $1,268.27

  1,000 24 40   6   1,169.36

  1,000 24 40   8   1,000.00

  1,000 24 40 10      862.01 AppendixLO1