Union local school district has bonds outstanding with a coupon rate of 4.9 percent paid semiannually and 20 years to maturity. the yield to maturity on these bonds is 5.6 percent and the bonds have a par value of $10,000. what is the dollar price of the bond? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Ans. Price of the bond is $9,250.57

Explanation:

Hi, first we need to establish the semi-annual coupon of the bond and the semi-annual discount rate (YTM semi-annually)

Coupon=10000*(4.9%/2)= $245

To turn the annaul YTM to semi-annual, we have to use the following equation

After all this, we are ready to find the price, here is the math of this.

Best of luck.

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