Sun Tans Co. has 8 percent coupon bonds on the market that has 8 years left...

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Question

Sun Tans Co. has 8 percent coupon bonds on the market that has 8 years left...

Sun Tans Co. has 8 percent coupon bonds on the market that has 8 years left to maturity. Face value of the bond is $1,000. The bonds make annual coupon payments. If the YTM on these bonds is 9%, what is the current bond price?

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Answer 1

Answer #1

Current bond price=$944.65

It is calculated by adding present value of annual coupon payments and present value of face value of the bond.

Current Price of Bonds = present Annual value of coupon Payment Present value of value | Annual coupon payment = = $1,000 8 8

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Answer 2

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Sun Tans Co. has 8 percent coupon bonds on the market that has 8 years left...

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