Ask Question
17 March, 09:27

How is the value of a bond determined? What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required rate of return is 10%?

+2
Answers (1)
  1. 17 March, 11:06
    0
    The present value of the bond is $1000

    Explanation:

    The value of a bond equals the present value of its expected future cash flows.

    The formula

    Present Value Paid at Maturity = Face Value / (Market Rate / 100) ^ Number Payments

    Present Value of Interest Payments = Payment Value * (1 - (Market Rate / 100) ^ - Number Payments) / Number Payments)

    Present Value of Bond = Present Value Paid at Maturity + Present Value of Interest Payments
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “How is the value of a bond determined? What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required rate ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers