XYZ Corp. issued a 15-year 6% coupon rate bond 5 years ago. Interest rates are now...
XYZ Corp. issued a 15-year 6% coupon rate bond 5 years ago. Interest rates are now 4%. What is the current price of the bond?
A. 1163.51
]B. 1000.00
C. 1223.96
D. 1162.22
Homework Answers
Coupon rate = 6%
Face value = $ 1000 (assuming to be)
Coupon payment = $1000*6% = $ 60
No of years to maturity(n) = 10 ( 15 years bond - 5 year already gone)
yield to maturity = 4%
calculating the price of bond:
price = $ 486.65 + $ 675.56
price = $ 1162.21
Hence, Option D
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