Wesimann Co. issued 10-year bonds a year ago at a coupon rate of 8.2 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6.5 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Question

Ernesto Durham

Business

24 August, 21:59

Wesimann Co. issued 10-year bonds a year ago at a coupon rate of 8.2 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6.5 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

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Answers (1)

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Rocco Ruiz · Answer 1

Current Bond Price $ 1.113,15

Explanation:

If it's considered that one year past then we have 9 years to collect interest, we have to calculate how much are we willing to pay for that cash flow at a discount rate of 6,5%