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You are interested in investing in a five-year bond that pays a 7.8 percent coupon rate...

You are interested in investing in a five-year bond that pays a 7.8 percent coupon rate with interest to be received semiannually. Your required rate of return is 10.0 percent. What is the most you would be willing to pay for this bond? (Round answer to 2 decimal places, e.g. 15.25.)

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Answer #1

Let face value be 1000. Time=5*2= 10 periods 091 is semiannual . yield to maturity = 107 = 5% Coupon = Tods of face value = 3

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