Yan Yan Corp. has a $5,000 par value bond outstanding with a coupon rate of 5.8...

Yan Yan Corp. has a $5,000 par value bond outstanding with a coupon rate of 5.8 percent paid semiannually and 14 years to maturity. The yield to maturity of the bond is 6.4 percent.

What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Bond price

$

Expert Solution

Semiannual interest = $5,000 * 0.058 * 6/12 = $145

Current bond price = $145(PVIFA 3.2%,28) + $5,000(PVIF 3.2%,28)

Current bond price = ($145 * 18.3134492198) + ($5,000 * 0.4139696248)

Current bond price = $4,725.30

jeff jeffy answered 2 years ago

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