Question

Vulcan, Inc., has 8.2 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 10.2 percent, what is the current bond price

Answer 1

The current bond price (PV) is $878.16.

Step-by-step explanation:

The current bond price (PV) can be calculated by compiling the following data :

FV = -$1,000

n = 10

Pmt = $1,000 × 8.20% = -$82

P/yr = 1

YTM = 10.20%

Pv = ?

Using a Financial Calculator, the current bond price (PV) is $878.1575 or $878.16.