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2. Using semiannual compounding, what is the value to you of a 9% coupon bond with a par value of $10,000 that matures in 10 years if you require a 7% return

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Zviko

Answer:

The Value of the Bond, PV is $10.962.65

Explanation:

The Value of the Bond (PV) can be determined as follows :

PMT = ($10,000 × 9%) ÷ 2 = $450

P/YR = 2

N = 10

Required Return (YTM) = 7 %

FV = $10,000

PV = ?

Using a Financial Calculator, the Value of the Bond, PV is $10.962.65

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