Even though most corporate bonds in the United States make c

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 10 years to maturity, and a coupon rate of 7.6 percent paid annually. If the yield to maturity is 8.7 percent, what is the current price of the bond?

Solution

FV = 1000, N = 10, PMT = 76, rate = 8.7%

use PV funciton in Excel

price of the bond = 928.46