Question
Asked Oct 14, 2019
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Alshon, Inc. has 6.00% coupon bonds that have 11 years left until maturity. The bonds make annual payments. What is the current bond price if the YTM on these bonds is 7.40% percent?

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Expert Answer

Step 1

Compute the current bond price:

The current bond price is $897.08.

Excel spread sheet:

The future value of...

A
Particulars
Values
($1,000)
7.40%
6%
($60)
2 FV
з ҮTM
4 Coupon rate
5 PMT
6 Number of years
PV (Price of the bond) $897.08
11
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A Particulars Values ($1,000) 7.40% 6% ($60) 2 FV з ҮTM 4 Coupon rate 5 PMT 6 Number of years PV (Price of the bond) $897.08 11

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