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Wine and Roses, inc offers a 10.0 percent coupon bond with semiannual payments and a yied...

Wine and Roses, inc offers a 10.0 percent coupon bond with semiannual payments and a yied to maturity of 11.00 percent. The bonds mature in 9 years. What is the market price of a $1000 face value bond?
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Answer #1

We have to calculate present value of the bond, which can be done using the PV function in excel:

= PV(rate,nper,pmt,fv)

Here, rate is 11%/2

nper is 9 years *2 = 18 periods

pmt is 10%/2 * $1000 = $50

=PV(11%/2,18,50,1000)

=943.77

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