BOND VALUATION 1 1 E] + FV/ (1+r) 1. Mc Jolly Corp issued a P10,000 5%, 10-year bond in 2015. Bonds are yielding 8% today. What price will yield 8% to bond buyers today? The bond pays interest semiannually. PB = PMT (PVFAk,n] + FV[PVFk,n] or PB = PMT| T[Z r(1+r) 2. Lucio Sy Company issued a 25-year bond 5 years ago with a face value of P1,000. The bond pays interest semiannually at a 10% annual rate. What is the bond's price today if the interest rate on comparable new issues is 12%? PB = PMT [PVFAk,n] + FV [PVFk.n] 3. Calculate the market price of a P1,000 face value bond with a coupon rate of 12%, time until maturity is 15 years, and the current market rate is 10%. PB = PMT (PVFAK,n] + FV [PVFk,n] 4. What is the current yield on the bonds in the previous problem? 5. The Happy Company issued a P1,000 bond 5 years ago with an initial term of 25 years and a coupon rate of 6%. Today's interest rate is 10%. What is the bond's current price if interest is paid semiannually? PB = PMT(PVFAk,n] + FV[PVFk,n] BOND VALUATION 1 1 E] + FV/ (1+r) 1. Mc Jolly Corp issued a P10,000 5%, 10-year bond in 2015. Bonds are yielding 8% today. What price will yield 8% to bond buyers today? The bond pays interest semiannually. PB = PMT (PVFAk,n] + FV[PVFk,n] or PB = PMT| T[Z r(1+r) 2. Lucio Sy Company issued a 25-year bond 5 years ago with a face value of P1,000. The bond pays interest semiannually at a 10% annual rate. What is the bond's price today if the interest rate on comparable new issues is 12%? PB = PMT [PVFAk,n] + FV [PVFk.n] 3. Calculate the market price of a P1,000 face value bond with a coupon rate of 12%, time until maturity is 15 years, and the current market rate is 10%. PB = PMT (PVFAK,n] + FV [PVFk,n] 4. What is the current yield on the bonds in the previous problem? 5. The Happy Company issued a P1,000 bond 5 years ago with an initial term of 25 years and a coupon rate of 6%. Today's interest rate is 10%. What is the bond's current price if interest is paid semiannually? PB = PMT(PVFAk,n] + FV[PVFk,n]