Answer:
The value of the bond is 116.34 Euros
Explanation:
The price of a bond is the present value of all cash flows generated by the bond (i.e. coupons and face value) discounted at the required rate of return
The Bond is a Security that obligates the issuer to make specified payments to the bondholder. .
A Coupon is The interest payments made to the bondholder.
The Coupon rate is theAnnual interest payment, as a percentage of face value.
PV= cpn + cpn + ....... + (cpn+par)
(1+r)∧1 (1+r)∧2 (1+r)∧t
PV= 4.25 + 4.25 + 4.25 + 104.25
(1.0015)∧1 (1.0015)∧2 (1.0015)∧3 (1.0015)∧4
PV= 116.34 Euros
