Question

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Weismann Co. issued 17-year bonds a year ago at a coupon rate of 11 percent. The...

Weismann Co. issued 17-year bonds a year ago at a coupon rate of 11 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 8 percent, what is the current bond price? Multiple Choice • $586.82 • $1,278.10 • $1,718.94 • $1,268.10 • $1,187.49

Solutions

Expert Solution

The current bond price is calculated using the PV function:-

=PV(rate,nper,pmt,fv0)

=PV(8%/2,16*2,11%/2*1000,1000)

=1268.10


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