Question
In: Finance
BA Corp is issuing a 10-year bond with a coupon rate of 6.04 percent. The interest...
BA Corp is issuing a 10-year bond with a coupon rate of 6.04 percent. The interest rate for similar bonds is currently 5.57 percent. Assuming annual payments, what is the value of the bond?
Solutions
Expert Solution
| Computation Of Bond Price | ||
| a | Annual Coupon Amount | $ 60.40 |
| b | Present Value Annuity Factor for (10 Years,5.57%) | 7.512382 |
| c | Present Value Of Annual Interest (a*b) | $ 453.75 |
| d | Redemption Value | $ 1,000.00 |
| e | Present Value Of (10 Years,5.57%) | 0.58156 |
| g | Present Value Of Redemption Amount (d*e) | $ 581.56 |
| f | Bond Value (c+g) | $ 1,035.31 |
jeff jeffy answered 2 years agoRelated Solutions
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