Great Wall Pizzeria issued 11-year bonds one year ago at a coupon rate of 6.8 pe
ID: 2650103 • Letter: G
Question
Great Wall Pizzeria issued 11-year bonds one year ago at a coupon rate of 6.8 percent. If the YTM on these bonds is 9 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
I had $85.87 but it was wrong.
Great Wall Pizzeria issued 11-year bonds one year ago at a coupon rate of 6.8 percent. If the YTM on these bonds is 9 percent, what is the current bond price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
I had $85.87 but it was wrong.
Explanation / Answer
Years to Maturity= 11 years
Coupon rate=6.8% 1000*6.8%=68
YTM=9%
Current Bond Price=
Bond Price=68+(1-1(1+.09)11/.05+1000*(1/(1+.09)11)
68+(1-1/2.58/.09)+1000*1/2.58)
Bond Price= Approximately $ 840
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