Question
Using Excel to solve each and all the problems. Make sure to have detailed cash flows related to your calculations. 1. You are trying to
Using Excel to solve each and all the problems. Make sure to have detailed cash flows related to your calculations.
1. You are trying to decide upon the purchase of 30-year bonds that have a coupon rate of 5.45% (interest paid semi-annually). The bonds are currently selling at par. The required rate for these bonds will rise to 7.25% in 5 years. Whats the value of these bonds 5 years from now (i.e., at the end of year 5 or beginning of year 6)?
*Need to find Bond price at end of year 5 using BOTH NPV and PV*
*Bond year cash flows increase in increments of 0.5, so it starts at 5.5,6,6.5,...,30*
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