Nesmith Corporation's outstanding bonds have a $1,000 par value, a 7% semiannual coupon, 20 years to...

Nesmith Corporation's outstanding bonds have a $1,000 par value, a 7% semiannual coupon, 20 years to maturity, and an 11% YTM. What is the bond's price? Round your answer to the nearest cent.

Solutions

Expert Solution

The price of the bond can be calculated with the help of PV function of excel

Inputs required:

FV = 1000

Coupon (PMT) = 7%/2 * 1000 = 35

Nper = 20 * 2 = 40

Rate = 11%/2 = 5.50%

=PV(0.055,40,35,1000,0)

= 679.08

jeff jeffy answered 2 years ago

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