2). Suppose a St. Jude bond matures in N = 15 years, pays C= 8%...
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2). Suppose a St. Jude bond matures in N = 15 years, pays C= 8% coupon monthly if held to maturity and has a face value of F = $5,000. The market rate currently available on comparable bonds is r = 6%
a) What is the value of the bond if sold today?
b) What would happen if the market rate currently available on comparable bonds increased to r=9.275%? Would the bond sell at a premium or discount?
please describe answers step by step using excel, and providing formula to answer the problem.
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