A 15-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 5.50% (2.750% of face value every six months). The reported yield to maturity is 5.2% (a six-month discount rate of 5.2-2-2.613 a. What is the present value of the bond? b-1. if the yield to maturity changes to 1%, what will be the present value? b-2. If the yield to maturity changes to 8%, what will be the present value? b-3. If the yield to maturity changes to 15%, what will be the present value? Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. & Present value b-1. Present value b-2. Present value 6-3. Present value

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Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.