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    ginny29's Avatar
    ginny29 Posts: 1, Reputation: 1
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    #1

    Aug 9, 2008, 02:50 PM
    Bond calculations
    Determine the value of a $1,000 denomination Bell South bond with a 7 percent coupon rate maturing in 20 years for an investor whose required rate of return is:
    a. 8 percent
    b. 7 percent
    c. 5 percent
    Ithappenstoall's Avatar
    Ithappenstoall Posts: 363, Reputation: 37
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    #2

    Aug 21, 2008, 02:01 AM
    Pv or current price of the bonds would be 901$ for a 1000$ for b and approximately 1251$ for c. your coupon payment is 70$ (I assumed annual payment) maturity in years 20 and face value of 1000 and formula PV = [ S CFt/(1 + I)t] + [FV / (1 + I)t]
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