A corporate bond has a face value of $10 000,a coupon rate of interest of 8.25% per annum,payable semi-annually,and six-and-a-half years remaining to maturity.The market interest rate for bonds of similar risk and maturity is currently 9.5% per annum,what is the present value of the bond?

Question

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The present value of the bond is calculated by discounting the semi-annual coupon payments and the face value at the market interest rate. The bond pays $412.50 every six months (8.25% of $10,000 divided by 2), and the market rate is 4.75% per period (9.5% divided by 2). With 13 periods remaining, the present value is approximately $9403.96.

A Corporate Bond Has a Face Value of $10 000,a