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  • Brielle

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    Kim Flores
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    This document discusses bond pricing and provides examples of calculating the issue price of bonds with different coupon rates and maturity values. It shows that when the coupon rate equals the effective rate, the issue price remains the same as the face value, but when the coupon rate is different than the effective rate, the issue price is calculated using the coupon amount and effective rate in the pricing formula.

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    This document discusses bond pricing and provides examples of calculating the issue price of bonds with different coupon rates and maturity values. It shows that when the coupon rate equals the effective rate, the issue price remains the same as the face value, but when the coupon rate is different than the effective rate, the issue price is calculated using the coupon amount and effective rate in the pricing formula.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    31 views1 page

    Brielle

    Uploaded by

    Kim Flores
    This document discusses bond pricing and provides examples of calculating the issue price of bonds with different coupon rates and maturity values. It shows that when the coupon rate equals the effective rate, the issue price remains the same as the face value, but when the coupon rate is different than the effective rate, the issue price is calculated using the coupon amount and effective rate in the pricing formula.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    1. Since the coupon and effective rate are the same, the issue price stays at PHP2,000.

    2. Issue price = (1,000 + 50 coupon)/1.06 = 990.56

    3. Issue price = (1000 + 70 coupon)/1.05 = 1,019.05

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