Staind, Inc., has 7 percent coupon bonds on the market that have 11 years left to...

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Staind, Inc., has 7 percent coupon bonds on the market that have 11 years left to...

Staind, Inc., has 7 percent coupon bonds on the market that have 11 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10 percent, what is the current bond price?

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Answer 1

Answer #1

Par value = 1000

YTM = 10%

Maturity = 11

Coupon = Coupon Rate * Par value = 7%*1000 = 70

Current bond Price = PV of all coupons + PV of Par value = 70*(1-(1+10%)^-11)/10% + 1000/(1+10%)¹¹ = 805.15

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Answer 2

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