MTV Corporation has 10 percent coupon bonds on the market with a par of $1,000 and 8 years left to maturity. The bonds make semi-annual interest payments. If the market interest rate on these bonds is 8 percent, what is the current bond price? Can you please show an excel formula?

MTV Corporation has 10 percent coupon bonds on the market with a par of $1,000 and 8 years left to maturity. The bonds make semi-annual interest payments. If the market interest rate on these bonds is 8 percent, what is the current bond price? Can you please show an excel formula?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 13P

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Question

Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.

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