You are offered an 12-year, $1,000 par value bond with a 14.5% coupon payment. Interest on this bond is paid semiannually. If the yield to maturity on this bond is 13%; how much should you pay for this bond? $ Chapter 7 Bond value = PV of the coupons + PV of the face value FV = PMT X 1-1/(1+YTM)nmat + YTM (1 + YTM )nmat Call Price Call bond Value = PMT X 1-1/(1+YTC)ncall YTC (1+YTC)ncall Total Yield = Capital gains yield + Current yield Current Yield Annual coupon payments PVB