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Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere...

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Finance

Even though most corporate bonds in the United States makecoupon payments semiannually, bonds issued elsewhere often haveannual coupon payments. Suppose a German company issues a bond witha par value of €1,000, 25 years to maturity, and a coupon rate of7.1 percent paid annually.

If the yield to maturity is 8.2 percent, what is the currentprice of the bond? (Do not round intermediate calculations andround your answer to 2 decimal places, e.g., 32.16.)

Answer & Explanation Solved by verified expert
3.8 Ratings (398 Votes)
To solve for the current price we need to solve the followingequationFollowing table shows the calculationsYearCFDiscount FactorDiscounted CF1 71001100821092421409242144177449177165622 71001100822085417208541722899675767160653    See Answer
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