Answered

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Great Wall Pizzeria issued 10-year bonds one year ago at a coupon rate of 6.3 percent. If the YTM on these bonds is 8.5 percent, what is the current bond price

Sagot :

Answer:

the current bond price is $865.38

Explanation:

The computation of the current bond price is shown below:

Given that

NPER is = 10 - 1 = 9

RATE is 8.5%

We assume the future value be $1,000

SO, the coupon i.e. PMT is = $1,000 × 6.3%

the formula is shown below:

=-PV(RATE,NPER,PMT,FV,TYPE)

After applying the above formula, the current bond price is $865.38

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