1 Homework 6 - Bond Valuation 2 13) 3 Suppose Hilton issues a bond for a term of 25 years, 4 with coupon rate 4.10% and YTM 4.10%. 5 What is current bond price? 6 7 Bond Price PV(coupon) + PV(face value) 8 = coupon * PVAIF + $1,000 * PVIF 9 PVAIF (2.05%, 50, -1) = 31.0959 10 PVIF (2.05%, 50, 0, -1) 0.3625 11 Each coupon = 1/2 [ $1,000 * 4.1%) = $20.5 12 13 Bond Price coupon * PVAIF + $1,000 * PVIF 14 15 = 20.5*C9+1000*C10 16 17 18 19 20 21 22 23