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wine and roses, inc. offers a 10.0 percent coupon bond with semiannual payments and a yield to maturity of 11.00 percent. the bonds mature in 9 years. what is the market price of a $1,000 face value bond? $1,381.47 $1,506.07 $943.77 $1,562.30 $1,076.69

Respuesta :

For a bond with a face value of $1,000, the market price is 943.77

Which five aspects of bond valuation are they?

The bond's price, interest rate and yield, maturity date, and redemption features are the most significant aspects. You can determine whether a bond is an appropriate investment by analyzing these key components.

The discounted cash flow method is used to determine a bond's value. That is, the price of a bond is the discounted present value of the bond's cash flows at the required rate of return, which includes interest payments and par value repayment.

N per = 9 x 2 = 18

Rate = 11 x 2

PMT = 1000 x 10 % x 1/2 = 50

FV = 1000

PV =?

Market Price = PV(Rate, N per, PMT, FV)

= PV(11%/2,18,50,1000)

= 943.77.

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