Sqeekers Co. issued 13-year bonds a year ago at a coupon rate of 7.9 percent. Th

Question

Sqeekers Co. issued 13-year bonds a year ago at a coupon rate of 7.9 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6.2 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Sqeekers Co. issued 13-year bonds a year ago at a coupon rate of 7.9 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6.2 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Calculation of Current price of Bond

N = 13 years

semi annual interest = 39.5

semi annual years to maturity = 12 * 2 = 24

Bond price = Interest * PVAF (yield %, n years) + mv * PVAF yield %, n years

Applying the above formula, current bond price = $ 1142

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