Rockne, Inc. has an outstanding bonds that will mature in 6 years and pay an 8% coupon semiannually. If you paid P10,386.50 today and your required rate of return was 6.6%, did you pay the right price for the bond?

Problem 2: Bond Price Rockne, Inc., has an outstanding bonds that will mature in six (6) years and pay an 8% coupon semiannually. If you paid P10,366.50 today and your required rate of return was 6.6%, did you pay the right price for the bond? Unknown: Find present value of the bond when required rate of return is 6.6%. Compute for each period's cash flow for the next 6 years. Assumption(s) Required annual rate of return is 6.6 with semiannual compounding Par or face value of bond is P10,000 Values Given information: Annual interest rate, required rate of return Number of periods/years, nper Compounding frequency per year Par value of bond Coupon rate Current bond price Type of annuity Solve for PV of bond's future cash flow using PV or NPV function/formula: PV of bond's future cash flows Bond's future cash flows 6 month intervals Cash flow QUESTION: Did you pay the right price for the bond? 1 Nm 4 5 6 7 8 9 10 11 12