Great Wall Pizzeria issued 10-year bonds one year ago at a coupon rate of 6.3 percent. If the YTM on these bonds is 8.5 percent,
1 answer:
Answer:
the current bond price is $865.38
Explanation:
The computation of the current bond price is shown below:
Given that
NPER is = 10 - 1 = 9
RATE is 8.5%
We assume the future value be $1,000
SO, the coupon i.e. PMT is = $1,000 × 6.3%
the formula is shown below:
=-PV(RATE,NPER,PMT,FV,TYPE)
After applying the above formula, the current bond price is $865.38
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