Ask Question
17 April, 06:05

A bond that pays interest semiannually has a coupon rate of 5.02 percent and a current yield of 5.29 percent. The par value is $1,000. What is the bond's price?

+1
Answers (1)
  1. 17 April, 06:13
    0
    Bond's price is $948.96

    Explanation:

    Price of the bond is the present value of all cash flows of the bond. Price of the bond is calculated by following formula:

    According to given data

    Coupon payment = $1,000 x 5.02% = $50.2

    Current Yield = 5.29%

    Price of the Bond = Coupon Payment / Current Yield

    Price of the Bond = $50.2 / 5.29%

    Price of the Bond = $50.2 / 0.0529

    Price of the Bond = $948.9
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A bond that pays interest semiannually has a coupon rate of 5.02 percent and a current yield of 5.29 percent. The par value is $1,000. What ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers