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A company sold an issue of 12-year $1,000 par bonds for general corporation finance purposes. The bonds pay 4.85% interest, semiannually. Today's...

  1. A company sold an issue of 12-year $1,000 par bonds for general corporation finance purposes. The bonds pay 4.85% interest, semiannually. Today's required rate of return is 9.7%. How much should these bonds sell for today?
  2. a company issued of $1,000 par value bonds with 18 years left until maturity. The coupon rate is 7.7%, with semi-annual payments. If the current price of the bond is $1,175, what is the bond's YTM?
  3. a company issued $1000 par, 20-year bonds, with a coupon rate of 6.5% on April 30, 2015. If the bonds are currently selling at $758.18, what is the bond's YTM? 

Top Answer

660.45 3.0433% (semi annual)... View the full answer

1 comment
  • I have written the answer with four decimals places because on checking the bond price as a test (to check if my answer is correct), the 4 decimals places give the exact bond prices
    • payaljain3
    • May 09, 2018 at 3:08am

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