Problem 10-1 Aloha Inc. has 6 percent coupon bonds on the market that have 9 yea

Question

Problem 10-1

Aloha Inc. has 6 percent coupon bonds on the market that have 9 years left to maturity. If the YTM on these bonds is 7.6 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

       

Aloha Inc. has 6 percent coupon bonds on the market that have 9 years left to maturity. If the YTM on these bonds is 7.6 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

Ans

Details Amount Current Market Prize= sum total of Present Value of coupon payments and face value at end of maturity period discounted at YTM Maturity Period in years           9.00 Annual coupon rate 6.0% Annual YTM 7.6% Face Value 1,000.00 Price=(C*(1-(1+YTM)^-0)/1+YTM)+FV*1+YTM^-9      898.37 Where C=Coupon Amount PA YTM Annual YTM FV=Face Value

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