What is the value of a 10% semi-annual coupon bond with a par value of $1,000 that matures in 5 years and has a required rate of return of 9%?
A) $1,021.95
B) $1,038.90
C) $1,039.56
D) $1,064.18
E) $1,078.23

Question

Quizplus · Accepted Answer

$$P _ { 0 } = \$ 50 \left[ \frac { 1 - \frac { 1 } { ( 1 + .045 ) ^ { 10 } } } { .045 } \right] + \frac { \$ 1,000 } { ( 1 + .045 ) ^ { 10 } } = \$ 1,039.56$$

What Is the Value of a 10% Semi-Annual Coupon Bond