FIN-504.week4.problemset4.xlsx - Chapter 6 Interest Rates...

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Chapter 6 Interest Rates and Bond VaGiven Data:CSM CorporationCoupon-inte 6%Par Value###Maturity15yearsCurrent bon ###Assume that interest on the CSM bond is paidCompound2Modified n = 30Modified pa ###Annual r###modified r = ###Trial and Error method: Choose various required rates to determine the current bond value.Cell B14 should be blankCell B15 should have theThe spreadsheet will recalculate each time.Continue the processequals the current price of the bond (in this problem it is a premium of $874.Remember that for a bond to be priced at a premium, the couponRemember that for a bond to be priced at a discount, the couponYearPerioPaymenPVPayments201401###28.9296###PVA538.191420152###27.89743###26.902020164###25.9422###PV336.23075###25.016620176###24.1240Bond Value$874.427###23.263220188###22.4332Current Bo$874.429###21.6328201910###20.860911###20.1166202012###19.3989Prove the following:13###18.7067When k8% value =$827.08202114###18.0393?????value =$874.4215###17.39566% value =###202216###16.774917###16.1764202318###15.599219###15.0427202420###14.505921###13.9884202522###13.489323###13.0080202624###12.543925###12.0963202726###11.664727###11.2485202828###10.847229###10.4601202930###10.0869203030###336.2307Bond Va $874.42Current$874.42
A)N= 3I= 18PMT =$5,000$10,871.36B)300/0.15$2,000.00C)N= 5I = 16FV =$35,000$16,663.96D)N = 6I = 12PMT=$1,500FV$7,000$9,713.54E)$14,115.27Present Value ofCash Flows

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