Booker Petroleum Refiners (BPR) has an issue of 8-year, 11% annual coupon bonds outstanding. The bonds, which were originally is

Question

3 years ago

15

Booker Petroleum Refiners (BPR) has an issue of 8-year, 11% annual coupon bonds outstanding. The bonds, which were originally is

sued 12 years ago, have a face value (FV) of $1,000, a yield to maturity (YTM) of 7%, and are noncallable. What is the current market price of BPR’s bonds? (Note: Do not round your intermediate calculations.)

Business

1 answer:

Rzqust [24] · Answer 1 · 2022-09-11T00:53:03+03:00

Answer:

$1,238.85

Explanation:

In this question, we use the present value formula which is shown in the spreadsheet.

The NPER represents the time period.

Given that,

Future value = $1,000

Rate of interest = 7%

NPER = 8 years

PMT = $1,000 × 11% = $110

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the answer would be $1,238.85