Homework SourseBSW Corporation has a bond issue outstanding with an annual
BSW Corporation has a bond issue outstanding with an annual coupon rate of 8.2 percent paid quarterly and four years remaining until maturity. The par value of the bond is $1,000. Determine the fair present value of the bond if market conditions justify a 12.5 percent, compounded quarterly, required rate of return. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
| BSW Corporation has a bond issue outstanding with an annual coupon rate of 8.2 percent paid quarterly and four years remaining until maturity. The par value of the bond is $1,000. Determine the fair present value of the bond if market conditions justify a 12.5 percent, compounded quarterly, required rate of return. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) |
Solution
PMT = 82/4, FV = 1000, N = 16, rate = 12.5%/4
use PV function in Excel
fair present value = 866.25
