Question

pay SPUL VUV Wuvos this price, the bonds yield 5.9 percent. What must the coupon rate be on the bonds? 6. Bond Prices [LO2] Sqeekers Co. issued 15-year bonds a year ago at a coupon rate of 4.1 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 4.5 percent, what is the current bond price? Dand V: 91 Heginbotham Corp. issued 20-year bonds two years ago at a

Hi!

Would you be able to solve #6 problem using only a financial calculator ?

Thanks in advance for your time.

Answer 1

Calculate for PV in the financial calculator, and punch in:

I/Y =4.5%/2 =2.25%

N=14*2 =28

PMT =4.1%/2*1000 =20.5

FV=1000

The answer will be 958.78

Also the answer can be calculated in excel with the formula =PV(4.5%/2,14*2,4.1%/2*1000,1000)