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Microhard has issued a bond with the following characteristics: Par: $1,000 Time to maturity: 15 years Coupon rate: 7 percent Semiannual payments Calculate the price of this bond if the YTM is 9 percent.

Respuesta :

Answer:

$837.11

Explanation:

The computation of the present value is shown below:

Given that

Future value = $1,000

NPER = 15 × 2 = 30

PMT = $1,000 × 7% ÷ 2 = $35

RATE = 9% ÷ 2 = 4.5%

The formula is shown below:

= -PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $837.11

The same is to be considered

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