Nesmith Corporation's outstanding bonds have a $1,000 par value, an 8% semiannual coupon, 18 years to...

Nesmith Corporation's outstanding bonds have a $1,000 par value, an 8% semiannual coupon, 18 years to maturity, and a 10% YTM. What is the bond's price? Round your answer to the nearest cent.

Expert Solution

Semiannual interest = $1,000 * 0.08 * 6/12 = $40

The price of the bond is:

Current bond price = $40(PVIFA 5%,36) + $1,000(PVIF 5%,36)

Current bond price = ($40 * 16.5468517047) + ($1,000 * 0.17365741453)

Current bond price = $835.53

jeff jeffy answered 2 years ago

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Nesmith Corporation's outstanding bonds have a $1,000 par value, an 8% semiannual coupon, 18 years to...

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