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Five years ago, Cookie Limited issued a bond with 15% coupon rate, semi-annual coupon payments, $1000...

Five years ago, Cookie Limited issued a bond with 15% coupon rate, semi-annual coupon payments, $1000 face value and 15 years until maturity. If you bought this bond 4 years ago (right after the bond made its coupon payment) when the YTM was 11%, how much did you pay for the bond? Please do not use excel or a financial calculator and show formulas.

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Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

JUST WRITTEN IN EXCL, NO EXCEL USED. USED ONLY FORMULA. THANK YOU

Home nert Page Layout Formulas Data Review View dd-Ins as Cut E AutoSum ー E ゴWrap Text General copy ▼ ▲· 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Paste B I 프 . 灬 Sort &Find & 2 ClearFe Select Edting Format Painter Formatting, as Table w styles. Styles ▼ ㆆ ▼ Clipboard A1122 Al Font Alignment Number Cells Al AK AL AM AN AO AP AQ AR AS AT AU 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 (4 トト , NOTE FIVE YEARS AGO, THE LIFE OF BOND WAS 15 YEARS YOU BOUGHT 4 YEARS AGO, SO LIFE REMAINING = 14 YEARS SO FOR YOU LIFE OF BOND 14 YEARS YTM = 11% SEMI ANNUAL COUPON SO COUPON AND YTM DIVIDED BY 2 AND YEARS MULTIPLIED BY 2 COUPON X PVIFA @ 11%/2, 14*2 PERIODS + PAR VALUE X PVIF @ 11%/2, 142 PERIODS (150/2) X PVIFA @ 5.5%, 28 PERIODS + PAR VALUE X PVIF @5.5%, 28 PERIODS 75 X PVI FA @ 5.5%, 28 PERIODS + PAR VALUE X PVIF @5.5%. 28 PERIODS PURCHASE PRICE OF BOND PURCHASE PRICE OF BOND PV OF ANNUITY FORMULA PRESENT VALUE FORMULA A/r (1-(1/(1+r)An) FV/(1+r)An (75/0.055)*(1-(1/(1+0.055)A28(1000/(1+0.055)A28) PURCHASE PRICE OF BOND 1282.43 BIDDING, UNDERWRITING . . EUAC AW PM LIFE / LP, lp, MRP, INFLATION YIELD . . WARRANTrefund bond , CLEAN INVOICE PRICE /Sheet1 Sheet3 Sheet4 06:06 01-02-2019

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