Zhen Yi Computers has an outstanding issue of bond with a par value of $1,000, paying 12 percent coupon rate semi-annually. The bond was issued 25 years ago and has 5 years to maturity
What is the value of the bond assuming 14 percent rate of interest?
Coupon payment = 1,000 × 0.12 = $120
Semi-annual coupon payment = 120/2 = $60
Using financial calculator: PMT= 60, I=7, N=10, FV=1000, CPT PV = $929.76
Business
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