Modern Visionary Hotel Chain has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature...

Modern Visionary Hotel Chain has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in six years, and have a 5 percent coupon. The annual yield to maturity is 12.6%. What is the bonds current price? (round to the nearest penny)

N:

I:

PV:

PMT:

FV:

Expert Solution

,Semi annual rate = 12.6% / 2 = 6.3%

Number of periods = 6 * 2 = 12

Semi annual coupon = [(5 / 100) * 1000] / 2 = 25

Keys to use in a financial calculator:

N: 12

I: 6.3

PV: 686.59

PMT: 25

FV: 1000

Price will be $686.59

jeff jeffy answered 2 years ago

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