Question: solve WITHOUT A FINANCIAL CALCULATOR OR EXCEL 12. Bond Valuation. You are interested in buying a $1,000 par value bond with 10 years to maturity

solve WITHOUT A FINANCIAL CALCULATOR OR EXCEL

12. Bond Valuation. You are interested in buying a $1,000 par value bond with 10 years to maturity and an 8 percent coupon rate that is paid semiannually. How much should you be willing to pay for the bond if the investor's required rate of return is 10 percent? ANSWER: PV = C(PVIFA x = 5%, -20) + FV(PVIF - 5%, -20) PV = 40(12.4622) + 1,000(0.3769) PV =$875.39

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