B14 fix G H A B D E F 1 Homework 6 - Bond Valuation 2 12 3 Suppose Marriot issued 14-year bonds a year ago at a coupon rate of 10%. 4 The bonds make semiannual payments. If the YTM on these bonds is 15%, 5 What is the current bond price? 6 7 Bond Price = PV(coupon) + PV(face value) 8 = coupon * PVAIF + $1,000 * PVIF 9 PVAIF (7.5%, 26, -1) = 11.2995 10 PVIF (7.5%, 26, 0, -1) = 0.1525 11 Each coupon = 1/2 ($1,000 * 10%] = $50 12 13 Bond Price = coupon PVAIF + $1,000 PVIF =50*C9+1000*C10 14 15 16 17 18 19 20 21 22 23 Sheet1 Shat2 Sheet3