Assume a par value of $1,000. Caspian Sea plans to issue a 14.00 year, annual pay...

Assume a par value of $1,000. Caspian Sea plans to issue a 14.00 year, annual pay bond that has a coupon rate of 8.06%. If the yield to maturity for the bond is 7.72%, what will the price of the bond be?

Expert Solution

Bond price = (Face value * Coupon%) * (1-(1+r)^-n)/r + Redemption value / (1+r)^n
Bond price = (10008.06%) (1-(1+7.72%)^-14)/7.72% + 1000/(1+7.72%)^14 =	1028.49

jeff jeffy answered 2 years ago

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Assume a par value of $1,000. Caspian Sea plans to issue a 14.00 year, annual pay...

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