Assume a par value of $1,000. Caspian Sea plans to issue a 16.00 year, semi-annual pay...

Assume a par value of $1,000. Caspian Sea plans to issue a 16.00 year, semi-annual pay bond that has a coupon rate of 7.82%. If the yield to maturity for the bond is 8.13%, what will the price of the bond be?

Answer format: Currency: Round to: 2 decimal places.

Expert Solution

Semiannual interest = $1,000 * 0.0782 * 6/12 = $39.1

Current bond price = $39.1(PVIFA 4.065%,32) + $1,000(PVIF 4.065%,32)

Current bond price = ($39.1 * 16.4832041202) + ($1,000 * 0.23353100818)

Current bond price = $878.02

jeff jeffy answered 2 years ago

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Assume a par value of $1,000. Caspian Sea plans to issue a 16.00 year, semi-annual pay...

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