Vanilla bond valuation | Business & Finance homework help
Company A:
Bond Information:
Face Value of Bond = $10,000
Coupon Rate = 5%
Time to Maturity = 10 years
Yield to Maturity = 3.0 %
Price of One Bond (Company A): $10,000 + (5%*(10/2))/[1+3.0%^10] = $9,936.50
Bond Information:
Face Value of Bond = $10,000
Coupon Rate = 5%
Time to Maturity = 10 years
Yield to Maturity = 3.0 %
Price of One Bond (Company A): $10,000 + (5%*(10/2))/[1+3.0%^10] = $9,936.50
Company B:
Bond Information:
Face Value of Bond = $20,000
Coupon Rate = 6%
Time to Maturity = 15 years
Yield to Maturity = 4.25 %
Price of One Bond (Company B):$20,000 + (6%*(15/2))/[1+4.25%^15]=$18,364.55
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