NEED EXCEL FORMULAS FOR ANSWER NOT JUST FINAL NUMBER Question: ABC HAS A 20 YEAR BOND WITH 7% COU...

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Question

NEED EXCEL FORMULAS FOR ANSWER NOT JUST FINAL NUMBER

Question: ABC HAS A 20 YEAR BOND WITH 7% COUPON PAID ANNUALLY AND IS PRICED $944.00. IF ISSUANCE COSTS ARE 3%, WHAT IS COST OF BOND TO ABC?

Answer 1

Answer #1

This can be solved using financial calcultor or excel
Using financial calculator
N=20
PMT=7%*1000=70
PV=-944*(1-3%)=-915.68
FV=1000
CPT I/Y=7.85%

using excel
=RATE(20,70,-915.68,1000)
=7.85%

Answer 2

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