4-6 Bond pricing Example What is the price ofa 6% annual coupon bond with a$1,000 face value, which matures in 3 years? Assume a required return of 5.6%0 60 60 1.060 Py (1.056)(1.056)2(1.056)3 PV=$1,010.77 Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 4- 6 Irwin/McGraw-Hill Bond Pricing Example What is the price of a 6 % annual coupon bond, with a $1,000 face value, which matures in 3 years? Assume a required return of 5.6%. $1,010.77 (1.056) 1,060 (1.056) 60 (1.056) 60 1 2 3 = = + + PV PV