Question

Five years​ ago, Simpson Warehouses Inc. issued twentyminusfiveminusyear ​10% annual coupon bonds with a​ $1,000 face value each. Since​ then, interest rates in general have risen and the yield to maturity on the Thompson bonds is now​ 12%. Given this​ information, what is the price today for a Thompson Tarps​ bond?

Answer 1

The price today for a Thompdon

tarps bond is $850.61

Step-by-step explanation:

coupon rate = 10%

NPER = 20

Face value = $1000

PMT = Face value*coupon rat

= 100

yield = 12%

price = PV = $850.61

Therefore, The price today for a Thompdon

tarps bond is $850.61