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    Bond Valuation and Worksheet

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please see the attached files. Could you please use formula or add comments so that I understand it for the future? I also attached copies from my book regarding this problem.
    Thank you!

    © BrainMass Inc. brainmass.com June 4, 2020, 3:25 am ad1c9bdddf


    Solution Preview

    Below is you tutorial.

    Please note that rather than accomplishing the Excel sheet you provided, I presented the step by step solution here.

    Topic 5 Individual Issue Value
    From the disclosure under Market Information, we know that the current rate of the note issue is 6.875% (7 year term), hence we will use this information in computing the present values of both the principal and the interest payments of the note.

    Please note that since no additional information was provided, I assumed that the note pays interest once a year.

    PV of principal (face) amount = Principal x [1/(1+Market rate)^year] = $30 million x [1/(1+6.875%)^7] = $18,835,986.07

    Interest payment = $30,000,000 x 4. 25% = $1,275,000.00

    PV of interest payments ...

    Solution Summary

    The expert examines bond valuation and worksheets for a company. Excel is used.