Lycan, Inc., has 8.9 percent coupon bonds on the market that have 6 years left to maturity. The bonds make annual payments and have a par value of $1,000. If the YTM on these bonds is 10.9 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) Current bond price $\

$915.11

Explanation:

Given:

n= 6

Face value: $1,000

Rate of coupon: 8.9% => Coupon payment is: 1000*8.9% = $89

YMT = 10.9%

As the know that, current bond price =  present value of coupon received annually + present value of bond

Present bond value is: = $537.5

Present value of coupon received annually: To calculate PV of coupon received, we use excel in formula PV(discounting rate ,Nper,- PMT) = PV(10.9%,6,-89) = $377.61

Hence, the current bond price =  $377.61+ $537.5=  $915.11