Corporate Finance - Present Value Exercises II Questions

Instructions:.

You should submit an electronic copy of your excel solution on Canvas. Preparation of problem sets should be done individually, but you are allowed to discuss the related concepts with your learning team. Your solution should be formatted and laid out so that it is easy to read and clearly shows your work, the logic behind your answers, and any assumptions you made in the analysis.

Questions Based on Session 4

1 A bond with 5 years to maturity, a face value of $1,000 and a coupon rate of 9.0% is selling for $950. What is its yield to maturity? If the yield changes to 9.0%, what will be the new price of the bond? (Assume annual coupon payments.)