Ch 3_Bond Valuation_Solution.xlsx - BOND PRICING Annual Coupons Inputs Today Maturity Date Number of Years to Maturity(T Face Value(PAR \$ Coupon Rate

# Ch 3_Bond Valuation_Solution.xlsx - BOND PRICING Annual...

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Annual CouponsInputsToday10/3/2018Maturity Date10/3/2022Number of Years to Maturity (T)4Face Value (PAR)\$ 100.00 Coupon Rate5%Annual Coupon Payment\$ 5.00 Coupon rate*ParRequired Annual Yield4.50%Bond Price using a TimelinePeriod01234\$ 5.00 \$ 5.00 \$ 5.00 \$ 105.00 Cash Flows\$4.78 \$4.58 \$4.38 \$88.05 Present Value of Cash Flows=C14/(1+\$B\$10)^C13Bond Price \$101.79 \$4.78 \$4.58 \$4.38 \$88.05 =-PV(\$B\$10,C13,0,C14)Bond Price using the NPV Function\$101.79 Bond Price =NPV(B10,C14:F14)Bond Price using the FormulaBond Price (P)`Bond Price using the PV Function\$101.79 Bond Price =-PV(B10,B6,B9,B7)Bond Price using the PRICE Function101.79Bond Price =PRICE(B4,B5,B8,B10,B7,1)BONDPRICING
Semi-annual CouponsInputsToday10/3/2018Maturity Date10/3/2022Number of Years to Maturity (T)4Face Value (PAR)\$ 100.00 Coupon Rate5%Annual Coupon Payment\$ 5.00 Required Annual Yield4.50%Bond Price using a TimelinePeriod01234\$ 2.50 \$ 2.50 \$ 2.50 \$ 2.50 Cash Flows\$2.44 \$2.39 \$2.34 \$2.29 Present Value of Cash Flows=-PV(\$B\$11/2,C14,0,C15)Bond Price \$101.81 =SUM(C16:J16)Bond Price using the NPV Function

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• Fall '18
• Halil