(Related to Checkpoint 9.4 ) (Bond valuation) A bond that matures in 15 years has a \( \$ 1,000 \) par value. The annual coupon interest rate is and the market's required yield to maturity on a comparable-risk bond is 15 percent. What would be the value of this bond if it paid interest a What would be the value of this bond if it paid interest semiannually? a. The value of this bond if it paid interest annually would be \( \$ \square \). (Round to the nearest cent.)

It appears that the **annual coupon interest rate** for the bond is missing from your question. To accurately determine the value of the bond when it pays interest annually or semiannually, we need the following information: 1. **Par Value (\$1,000)**: This is already provided. 2. **Time to Maturity (15 years)**: This is also provided. 3. **Annual Coupon Interest Rate**: **_Missing_** 4. **Market's Required Yield to Maturity (15%)**: Provided. ### **Steps to Calculate Bond Value:** Once the **annual coupon interest rate** is provided, you can calculate the bond's value using the following formulas: #### **a. When Interest is Paid Annually:** The bond price \( P \) can be calculated using the formula: \[ P = \left( \sum_{t=1}^{n} \frac{C}{(1 + r)^t} \right) + \frac{F}{(1 + r)^n} \] Where: - \( C \) = Annual coupon payment (\$1,000 \times annual coupon rate) - \( r \) = Annual yield to maturity (15% or 0.15) - \( n \) = Number of years to maturity (15) - \( F \) = Face value of the bond (\$1,000) #### **b. When Interest is Paid Semiannually:** Adjust the formula to account for semiannual payments: \[ P = \left( \sum_{t=1}^{2n} \frac{C/2}{(1 + r/2)^t} \right) + \frac{F}{(1 + r/2)^{2n}} \] Where: - \( C/2 \) = Semiannual coupon payment - \( r/2 \) = Semiannual yield to maturity - \( 2n \) = Total number of semiannual periods ### **Next Steps:** Please provide the **annual coupon interest rate** so I can help you compute the exact value of the bond for both annual and semiannual interest payments.