A municipal bond with a coupon rate of 2.7 percent has a yield to maturity of 3.7 percent. Assume a face value of $5,000. If the bond has 12 years to maturity, what is the price of the bond?

Bond Price= $4,522.47

Explanation:

Giving the following information:

Cupon= 5,000*0.027= $135

YTM= 3.7%

Face value= $5,000

Perios= 12 years

To calculate the price of the bond, we need to use the following formula:

Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price= 135*{[ 1 - (1.037^-12)] / 0.037]} + [5,000/(1.037^12)]

Bond Price= 1,289.33 + 3,233.14

Bond Price= $4,522.47

a corporation is legally separate from its owner, and it pays its own taxes.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.