BY USING EXCEL FORMULA . Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment?

File Home Insert Draw Page Layout Formulas Data Review View Help Share Comments X F# Insert Calibri 11 ' ' = >~ ake General U D 9X Delete > EM Paste B I U A $ ~ % , Sensitivity .00 0 Conditional Format as Formatting Table Cell Styles Sort & Find & Filter Select Format Analyze Data Clipboard Font Alignment Number Styles Cells Editing Analysis Sensitivity D15 X B D G H K L M N O Q R 2 Problem 6-19 3 Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1,000, and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. 4 5 6 10 7 S Maturity (years) Face value Coupon rate Yield to maturity 8 1,000 7% 6% 9 10 11 12 13 Maturity (years) Today's coupon payment of remaining coupon payments after today Bond price 14 15 16 6-19 + Ready + 70