Yan Yan Corp. has a $3,000 par value bond outstanding with a coupon rate of 5.6

Question

Yan Yan Corp. has a $3,000 par value bond outstanding with a coupon rate of 5.6 percent paid semiannually and 17 years to maturity. The yield to maturity of the bond is 6.1 percent.

What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Yan Yan Corp. has a $3,000 par value bond outstanding with a coupon rate of 5.6 percent paid semiannually and 17 years to maturity. The yield to maturity of the bond is 6.1 percent.

Explanation / Answer

We can use financial calculatro to solve the problem

FV= -$3000, YTM= 6.1/2=3.05%, N=17*2, Coupon = 5.6%/2*3000=-$84

Bond Price= 2842.64

Note: Here coupon payments are semi annual thus yield and coupon rates are halved and period is doubled. Negative sign indicates outflow.

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