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Nesmith Corporation's outstanding bonds have a $1,000 par value, a 7% semiannual coupon, 15 years to maturity, and an 8% YTM. What is the bond's price? Round your answer to the nearest cent.

Sagot :

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Answer:

$913.54

Explanation:

Calculation to determine the bond's price

Using Financial calculator to solve for PV( PRESENT VALUE)

N = 2 × 15 = 30

I/YR = 8%/2 = 4%

PMT = 1,000*7%*1/2=35

FV = 1000

PV=?

Hence,

PV = $913.54

Therefore the bond's price is $913.54

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