Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / To the nearest dollar, what is the current price of an 8%, $1,000 annual coupon bond that has sixteen years to maturity and a yield to maturity of 7
To the nearest dollar, what is the current price of an 8%, $1,000 annual coupon bond that has sixteen years to maturity and a yield to maturity of 7.00%? $701 $911 $1,094 $1,000
The correct answer is $ 1094.
Bond price = $ 1,000
Coupon interest rate = 8% = 0.08
Coupon payment = 1000 * 0.08 = $80
Yield to maturity = 7.00 % = 0.07
Remaining life of bond = 16 years
The Bond price is the present value of cash flows associated with the bond at 7% discount rate
= $1094.47
