Question

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

Answer 1

the current bond price is $865.38

Step-by-step 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