BSW Corporation has a bond issue outstanding with an annual coupon rate of 8.2 p
ID: 2823895 • Letter: B
Question
BSW Corporation has a bond issue outstanding with an annual coupon rate of 8.2 percent paid quarterly and four years remaining until maturity. The par value of the bond is $1,000. Determine the fair present value of the bond if market conditions justify a 12.5 percent, compounded quarterly, required rate of return. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
BSW Corporation has a bond issue outstanding with an annual coupon rate of 8.2 percent paid quarterly and four years remaining until maturity. The par value of the bond is $1,000. Determine the fair present value of the bond if market conditions justify a 12.5 percent, compounded quarterly, required rate of return. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Explanation / Answer
PMT = 82/4, FV = 1000, N = 16, rate = 12.5%/4
use PV function in Excel
fair present value = 866.25
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