Chapter. $6$: Calculate the Value of a Bond

Assume the following:

Coupon rate $=10\%$

Future Value $=$$$1,000$

YTM $($or $r_d$ or discount rate$)=9\%$

Number of years $=6$

Semiannual coupon payments

Payments begin six months from now

Calculate the value of the bond.

Note: This is like an example in class, similar to problem $2$ in the Connect homework, and is

similar to an attendance question.

Hint: Be very careful. Remember, coupon payments are twice per year. EVERY ANSWER

BELOW CAN BE CALCULATED WITH THE DATA, but only one is correct.

Use the below table if you wish to copy the data into Excel.