Question
In: Finance
A year ago, Perlman Co. issued a 15-year bond, at a coupon rate of 4.9% per...
A year ago, Perlman Co. issued a 15-year bond, at a coupon rate of 4.9% per annum paid semi-annually. If the bonds have a par value of $1000, and YTM is 4.5%, what is the current bond price?
Select one:
a. $1041.00
b. $1041.22
c. $1040.00
Solutions
Expert Solution
M = $1000, N = 14 * 2 = 28
SEMI-ANNUAL PERIODS, i = 4.5%/2 = 2.25% (semi-annually), C = 4.9% *
$1000/2 = $24.5 (semi-annually)
P = $504.89 + $536.32
P = $1,041.22
jeff jeffy answered 2 years agoRelated Solutions
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