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Title: Bond Calculation II
Description: This note goes into detail as to calculate bond value on a semi annual basis as well as interest rate, yield to maturity. Use these notes to finish your pesky Financial Management or Accounting Homework!! I aced my accounting exam using these notes!!
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II

Unit VI Question 2
CSU Math Center | 1-800-977-8449 x6538 | teamsucceed@columbiasouthern
...
adobeconnect
...
bonds have an annual coupon rate of 9 percent
...
Their par value is $1,000
...
The value of the Enterprise bonds if the interest is paid semiannually is $_____________
b
...


Since our bond pays interest semiannually, we use equation 9-2c:
1βˆ’

π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘ π‘’π‘šπ‘–π‘Žπ‘›π‘›π‘’π‘Žπ‘™) = (πΌπ‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘β„2) [

1
π‘Œπ‘‡π‘€ π‘€π‘Žπ‘Ÿπ‘˜π‘’π‘‘ 2𝑛
(1+
)
2
π‘Œπ‘‡π‘€ π‘€π‘Žπ‘Ÿπ‘˜π‘’π‘‘
2

] + π‘ƒπ‘Ÿπ‘–π‘›π‘π‘–π‘π‘Žπ‘™ [

1
( 1+

π‘Œπ‘‡π‘€ π‘€π‘Žπ‘Ÿπ‘˜π‘’π‘‘ 2𝑛
)
2

πΌπ‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘π‘Žπ‘¦π‘šπ‘’π‘›π‘‘ = π΅π‘œπ‘›π‘‘ π‘π‘œπ‘’π‘π‘œπ‘› π‘Ÿπ‘Žπ‘‘π‘’ Γ— π‘ƒπ‘Žπ‘Ÿ π‘£π‘Žπ‘™π‘’π‘’
πΌπ‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘π‘Žπ‘¦π‘šπ‘’π‘›π‘‘ = 0
...
08
𝑛=8
π‘ƒπ‘Ÿπ‘–π‘›π‘π‘–π‘π‘Žπ‘™ = π‘ƒπ‘Žπ‘Ÿ π‘£π‘Žπ‘™π‘’π‘’ = $1,000
1βˆ’
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘ π‘’π‘šπ‘–π‘Žπ‘›π‘›π‘’π‘Žπ‘™) = ($90⁄2)
[

1
0
...
08
0
...
04 )16
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘ π‘’π‘šπ‘–π‘Žπ‘›π‘›π‘’π‘Žπ‘™) = ($45) [
] + $1,000 [
]
( 1 + 0
...
04
1
1βˆ’
1
(1
...
04)16
0
...
8730] + $1,000 [ 1 ]
0
...
8730

1βˆ’

1 βˆ’ 0
...
5340]
0
...
466
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘ π‘’π‘šπ‘–π‘Žπ‘›π‘›π‘’π‘Žπ‘™) = ($45) [
] + $534
0
...
65] + $534
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘ π‘’π‘šπ‘–π‘Žπ‘›π‘›π‘’π‘Žπ‘™) = $524
...
25
b
...
09 Γ— $1,000 = $90
π‘Œπ‘‡π‘€ π‘€π‘Žπ‘Ÿπ‘˜π‘’π‘‘ = 0
...
08)8
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘Žπ‘›π‘›π‘’π‘Žπ‘™π‘™π‘¦) = $90 [
] + $1,000 [
]
(1 + 0
...
08
1
1βˆ’
1
(1
...
08)8
0
...
8509] + $1,000 [ 1 ]
0
...
8509

1 βˆ’ 0
...
5403]
0
...
4597
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘Žπ‘›π‘›π‘’π‘Žπ‘™π‘™π‘¦) = $90 [
] + $540
...
08
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘Žπ‘›π‘›π‘’π‘Žπ‘™π‘™π‘¦) = $90[5
...
30
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘Žπ‘›π‘›π‘’π‘Žπ‘™π‘™π‘¦) = $517
...
30
π΅π‘œπ‘›π‘‘ π‘‰π‘Žπ‘™π‘’π‘’ (π‘Žπ‘›π‘›π‘’π‘Žπ‘™π‘™π‘¦) = $1,057
Title: Bond Calculation II
Description: This note goes into detail as to calculate bond value on a semi annual basis as well as interest rate, yield to maturity. Use these notes to finish your pesky Financial Management or Accounting Homework!! I aced my accounting exam using these notes!!
Buy These NotesPreview