Question

Grohl Co. issued 9-year bonds a year ago at a coupon rate of 12 percent (APR).


Grohl Co. issued 9-year bonds a year ago at a coupon rate of 12 percent (APR). The bonds make semiannual payments. If the YTM on these bonds is 10 percent (APR), what is the current bond price?

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Answer #1

Given,

Par value of a bond = $ 1000

Coupon rate = 12%

Years to maturity = 8 years

No. of semi annual payments (n) = 8 years x 2 = 16

Yield to maturity (YTM) = 10%

Solution :-

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