Sheridan, Inc., has issued a three-year bond that pays a coupon rate of 8.5 percent. Coupon...
Sheridan, Inc., has issued a three-year bond that pays a coupon rate of 8.5 percent. Coupon payments are made semiannually. Given the market rate of interest of 4.2 percent, what is the market value of the bond? (Round answer to 2 decimal places, e.g. 15.25.)
Homework Answers
Value of Bond = 
Where r is the discounting rate of a compounding period i.e. 4.2%/2 = 2.1% _ _ (Semi Annual )
And n is the no of Compounding periods i.e. 3years * 2 = 6 periods _ _ (Semi Annual )
= 
= 237.269492891 + 882.76589763
= $ 1120.03
Market Value of the Bond is $ 1120.03
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