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Assume a $1,000 face value bond has a coupon rate of 8.5 percent paid semiannually and has an eight-year life. If investors are willing to accept a 10 percent rate of return on bonds of similar quality, what is the present value or worth of this bond?

Please answers should be in excel format

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Jarrod Robel
Jarrod RobelLv2
28 Sep 2019

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A 10-year bond with a $1,000 face value has a coupon rate of 8 percent paid semiannually. If current interest rates are 7 percent for bonds of a similar nature, calculate the price of the bond.

Question 1 - Bond valuation with semi-annual coupon payments [2 points]: You intend to purchase a 10-year, $1,000 face value bond with a coupon rate of 12%, paid semiannually. If your required rate of return is 10 percent, how much should you be willing to pay for this bond?

The Garcia Company’s bonds have a face value of $1,000, will mature in 10 years, and carry a coupon rate of 16 percent. Assume interest payments are made semiannually.
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b. How would your answer change if the required rate of return is 12 percent?

Answer should be in excel format

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