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goldfiish [28.3K]
3 years ago
5

Assume a par value of $1,000. Caspian Sea plans to issue a 9.00 year, semi-annual pay bond that has a coupon rate of 8.04%. If t

he yield to maturity for the bond is 7.79%, what will the price of the bond be
Business
1 answer:
Llana [10]3 years ago
6 0

Answer:

$1,015.96

Explanation:

The Price of the Bond (PV) can be calculated as follows :

Fv = $1,000

Pmt = ($1,000 × 8.04%) ÷ 2 = $40.20

n = 9 × 2 = 18

p/yr = 2

i = 7.79%

pv = ?

Using a financial calculator to input the values as shown above, the Price of the Bond (PV) is $1,015.96

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