Question

Bond valuation—Semiannual interest Calculate the value of each of the bonds shown in the following table, all of which pay interest semiannually. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Years to maturity Bond Coupon interest rate 10% 12 12 Par Value $1,000 1,000 500 12 Required stated annual return 8% 12 14 20 The value of bond Ais $ . (Round to the nearest cent.)

PLEASE SOLVE FOR BOND B AND C AS WELL. THANK YOU!

Answer 1

For Bond A
Number of Periods =12*2 =24
Semi annual YTM =8%/2 =4%
Semi annual coupon =10%*1000/2 =50
Price of Bond A using Financial Calculator
I/Y =4%;N=24;PMT =-50;FV =-1000;CPT PV =1152.47

For Bond B
Number of Periods =20*2 =40
Semi annual YTM =12%/2 =6%
Semi annual coupon =12%*1000/2 =60
Price of Bond B using Financial Calculator
I/Y =6%;N=40;PMT =-60;FV =-1000;CPT PV =1000.00


For Bond C
Number of Periods =5*2 =10
Semi annual YTM =14%/2 =7%
Semi annual coupon =12%*500/2 =30
Par value =500
Price of Bond B using Financial Calculator
I/Y =7%;N=10;PMT =-30;FV =-500;CPT PV =464.88