please show all steps and work. My previous answers (which were incorrect) were

Question

please show all steps and work. My previous answers (which were incorrect) were 6388.75 and 6594.25

P6-16 (similar to) Question Help Calla le bond. Corso Books has ust sold a callable bond. It s a hirty year mont y bond with an annual cou on a e of 12% and S5 000 per value The issue ho we er can call the bond sta ng a the end of 5 years lhe ca te ures Corso Books o pay one year oadditional in Brest al he ca 12 coupon payments), what is he bond price, if priced with lhe assurnplion hat he call will b on he "sl avallable call dale? if he el on his bond is 9% and What is the bond price if pricod with the assumplion tha the call wil be on the first available call date? Round to the nearest cent)

Explanation / Answer

Monthly Payment = 5000*12%/12 = $50

Final Payment = Par Value + 12 additional Payments = 5000+(12*50) = +5600

YTC = 9%

Monthly = 9%/12 = 0.75%

No. of years = 25-5 = 20

No. of months = 20*12 = 240

Excel Formula used =PV(0.75%,240,-50,5600)

Price of Bond = $4,625

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