write my assignment 2208

Assuming interest rates are 5% for AAA Rated Corporate bonds, calculate the value of your bond relative to this interest rate using equation . Assume that i = 5%. Is your bond selling for a premium or at a discount based on your calculation? What other factors can impact bond valuation?

I chose Apple Bond

Price = (coupon)*(1 – [1/ (1 + r)ᵐ] )     + ( par value )

                             R                                     (1 + r)ᵐ

Where:

P0 = current price of bond     

It = annual interest (coupon)  

PVn = par value at maturity   

n = # years to maturity    

i = prevailing market yield (required return)