Question

1.  Aloha, Inc. has 7% coupon bonds on the market that have 12 years left to maturity.  If...

1.  Aloha, Inc. has 7% coupon bonds on the market that have 12 years left to maturity.  If the YTM on these bonds is 9.1%, what is the current bond price? (My teacher got $848.55 as the answer but didn't give the steps on how she solved it. Please help)

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Answer #1

Bond Par Value = $1,000

Calculating Bond Price,

Using TVM Calculation,

PV = [FV = 1,000, PMT = 70, N = 12, I = 0.091]

PV = $848.55

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