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1. Using semi-annual compounding, what is the price of a 5 percent coupon bond with 10 years left to maturity and a market interest
1. Using semi-annual compounding, what is the price of a 5 percent coupon bond with 10 years left to maturity and a market interest rate of 7.2 percent? Assume that interest payments are paid semi-annually and that par value is $1000. Par value of bond (V) = $1,000 Coupon (PMT) 1000x5%/2=$25.00 Number of coupons (NPER) = 10x2=20 Market intereste rate (RATE) = 7.2%/2=3.60% Price = $845.07
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
