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On 14 March 2013 a company issued a bond with a face value of $100,000 that...

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Finance

On 14 March 2013 a company issued a bond with a face value of$100,000 that matures exactly 25 years later. The coupon rate is 6%p.a. compounded half-yearly. What is the bond's value on 14September 2018 assuming the market yield is 5% p.a. compoundedhalf-yearly.

a.

$100,000.00

b.

$112,365.17

c.

$112,174.30

d.

$117,017.04

e.

$112,551.39

Answer & Explanation Solved by verified expert
4.4 Ratings (886 Votes)
Starting from March 14th 2013 there are are 50 semiannual time periods for the next 25 years From March 14th 2013 to Sept 14th 2018 there are 11 semiannual time periods The remaining time periods till maturity equals 39 semiannual time periods ParFace    See Answer
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Transcribed Image Text

On 14 March 2013 a company issued a bond with a face value of$100,000 that matures exactly 25 years later. The coupon rate is 6%p.a. compounded half-yearly. What is the bond's value on 14September 2018 assuming the market yield is 5% p.a. compoundedhalf-yearly.a.$100,000.00b.$112,365.17c.$112,174.30d.$117,017.04e.$112,551.39

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