Combination of the present value of dollar

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A company has an outstanding bond that paid quarterly interest with an annual coupon of 4.25%, with a yield to maturity (required rate of return) of 3.85% and a maturity date of September 15, 2027. Par value is 1000.

1. Calculate the correct price of this bond using a combination of the present value of a dollar and the present value of an annuity formulas.

2. What is the price (as a percentage of principal) of the bond with a settlement date of March 15, 2017? If the yield (required rate of return) of this bond goes up 75 basis points what would the new price be?

Reference no: EM131510867

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