Sory, that\'s not correct Suppose that Ally Financial Inc. issued a bon this bon

Question

Sory, that's not correct Suppose that Ally Financial Inc. issued a bon this bond when it was issued was 6%. a. What was the price of this bond when it wa The price right after the first coupon is just the nine-year bond b. Assuming the yield to maturity remains c. Assuming the yield to maturity remains cor a. What was the price of this bond when it The price of this bond when it was issued wa Here is the cashflow timeline for part (c): Year $90 $1,090 Cash Flow b. Assuming the yield to maturity remains co We can also compute this result using a spreadsheet FV Excel Formula PMT The price before the first payment is S 1294S c. Assuming the yield to maturity remains cor The price after the first payment is $1204.5 HER- RATE PV Given Solve for PV OK

Explanation / Answer

c-

price of bond after first coupon payment

Using PV function in MS excel

pv(rate,nper,pmt,fv,type) rate = 6% nper = 9 pmt = 90 fv =1000 type = 0

PV(6%,9,90,1000,0)

($1,204.05)

Answer -1204.05 is correct one

c-

price of bond after first coupon payment

Using PV function in MS excel

pv(rate,nper,pmt,fv,type) rate = 6% nper = 9 pmt = 90 fv =1000 type = 0

PV(6%,9,90,1000,0)

($1,204.05)

Answer -1204.05 is correct one

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