Rules for Bond Valuation Problem Solving: a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value. Example: ___x 2.123456789 or 22.12345678 b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off). Example semi-annual: 13%/2 =0.065 c. For the "VALUE OF THE BOND/ PRICE OF THE BOND" round off your answers and final answers into whole numbers. Example: 824.59= 825 1. A bond issued by Delta Corporation matures in 12 years. It has a 12.5 percent annual coupon rate and a face value of P10,000. The bond has a discount rate to maturity of 9.5 percent. What is the price of Omega's bond today?
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Rules for Bond Valuation Problem Solving:
a. For the "PV FACTOR in computing the PV of the coupon and PV for the maturity value/ principal use until 8-9th decimal place" before multiplying the coupon payment or future value.
Example: ___x 2.123456789 or 22.12345678
b. For "COMPOUNDED RATES" include all decimals in the rate (do not round off).
Example semi-annual: 13%/2 =0.065
c. For the "VALUE OF THE
Example: 824.59= 825
1. A bond issued by Delta Corporation matures in 12 years. It has a 12.5 percent annual coupon rate and a face value of P10,000. The bond has a discount rate to maturity of 9.5 percent. What is the price of Omega's bond today?
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