ABC Company is issuing a new bond with a par value of $1000 and a coupon rate of 6%. The time to maturity is 28 years and the Yield to Maturity is 5.2%. If coupon payments are semi-annual, what is today's price of this bond
Bond Par Value = $1,000
Coupon Rate = 6% semi-annually
Time to Maturity = 28 years
YTM = 5.20%
Calculating Present Value of Bond,
Using TVM Calculation,
PV = [FV = 1000, T = 56, PMT = 30, I = 0.052/2]
PV = $1,117.30
So,
Bond Present Value = $1,117.30
ABC Company is issuing a new bond with a par value of $1000 and a coupon...
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