Question
Please show formulas P624 Bond valuation: Semiannual interest Find the value of a bond maturing in 6 years, with a $1,000 par value and a
Please show formulas
P624 Bond valuation: Semiannual interest Find the value of a bond maturing in 6 years, with a $1,000 par value and a coupon interest rate of 10% (5% paid semiannually) if the required return on similar-risk bonds is 14% annual interest (7% paid semiannually).
Problem 6-24 |
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Settlement |
| (Think of Settlement as the beginning of the duration of the bond) |
Maturity |
| (Think of Maturity as the end of the duration of the bond) |
Rate |
| (Coupon Rate) |
YTM |
| (Yield to Maturity or Required Rate fo Return) |
Redemption |
| (Bonds Face Value, Par Value, or Fair Price; Note that is is $100, not $1,000. You make the adjustments by multiplying the answer by 10.) |
Frequency |
| (Coupon payments are semiannul, so you put in a 2. If they are annual, then you input a 1) |
Basis |
| (Always leave it blank) |
Bond Price: |
| (The answer. But you need to multiply it by 10 to get the actual bond price.) |
Multiply by 10 |
| (Microsoft gives the bond price in 2 digits like in cell B111. You need to multiply it by 10 to get the actual bond price) |
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