1) A bond with 18 years until maturity has a coupon rate of 7.4 percent and a yi

Question

1)

A bond with 18 years until maturity has a coupon rate of 7.4 percent and a yield to maturity of 9 percent. What is the price of the bond? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price of the bond $

2)

May Industries has a bond outstanding that sells for $836. The bond has a coupon rate of 6.80 percent and 20 years until maturity. What is the yield to maturity of the bond? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

                   

  Yield to maturity %

Explanation / Answer

1)

2)

Face value (FV) $                                         1,000 Coupon rate 7.40% Number of compounding periods per year 1 Interest per period (PMT) $                                         74.00 Number of years to maturity 18 Number of compounding periods till maturity (NPER) 18 Market rate of return/Required rate of return 9.00% Market rate of return/Required rate of return per period (RATE) 9.00% Bond price PV(RATE,NPER,PMT,FV)*-1 Bond price $                                       859.91

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