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    Sunshine31's Avatar
    Sunshine31 Posts: 1, Reputation: 1
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    #1

    Oct 31, 2009, 09:53 PM
    Compute the price of the bonds on their issue date.
    A company issues bonds with a par value of $800,000 on their issue date. The bonds mature in 5 years and pay 6% annual interest in two semiannual payments. On the issue date, the market rate of interest is 8%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:

    present value of an annuity for 10 periods at 3%... 8.5302
    present value of an annuity for 10 periods at 4%... 8.1109
    present value of 1 due in 10 oeriods at 3%... 0.7441
    present value of 1 due in 10 periods at 4%... 0.6756
    decisionsupport's Avatar
    decisionsupport Posts: 31, Reputation: 1
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    #2

    Nov 1, 2009, 06:00 PM

    See here for step by step instructions on how to do just that...

    The Basics and Pricing of Debt Securities (Bonds)
    decisionsupport's Avatar
    decisionsupport Posts: 31, Reputation: 1
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    #3

    Jun 25, 2012, 02:47 PM
    I've moved the article to a new location if anyone is interested... The Basics And Pricing Of Debt Securities (Bonds) | eFinancialAnalysis
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