Calculation of Market Price of A Bond
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Question
Two years ago Southern Manufacturers offered a 10.5% coupon bond with semi-annual payments. At the time the yield to maturity on the market was also 10.5% and the bonds sold initially at par. The bonds have a total maturity (including the previous 2 years) of 15 years. What is the market price per bond if the yield to maturity is now 9%? The bonds have a face value of $1,000.
Summary: This question belongs to finance and discusses about market price per bond of a company’s bonds at a given yield to maturity rate.
Total word count: 15
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