Bond current value?

[cevans24]

Zecon Inc has 9% coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 7%, what is the current bond price?

I have no idea how to come up with the current price. Any helpful tips?

 

[tkhunny]

Why do you haev no idea? Are you looking for the Face Value? Are you sure it matters? Just pick a value and see what happens. Then pick another value and see if the answer is the same.

$1000

9% Coupon usually means 0.09 / 2 = 0.045 ==> $45 semi-annual coupon.

Discount 14 $45 coupons and one $1000 maturity value at 7% annual.