Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Calculate the value of a bond that matures in 19 years and has a $ 1,000 par value
Calculate the value of a bond that matures in
19 years and has a $ 1,000 par value. The annual coupon interest rate is
14 percent and the? market's required yield to maturity on a? comparable-risk bond is
9 percent.
The value of the bond is how much?
Computation of Value of Bonds using PV Function in Excel:
=-pv(rate,nper,pmt,fv)
Here,
PV = Value of Bonds = ?
Rate = 9%
Nper = 19 years
PMT = $1,000*14% = $140
FV = $1,000
Substituting the values in formula:
=-pv(9%,19,140,1000)
PV or Price of Bonds = $1,447.51
So, value of the bond is $1,447.51
