acct229 at Texas A&M

3. Selling at a Discount

in Chapter 10 (Video 3 of 8)
When a bond's coupon rate is less than the market rate, that bond will sell at a discount. We'll figure out how to price a bond in that situation.

This Video Mentioned Some Formulas

Bond Face Value
+ Unamortized Premium
– Unamortized Discount
Bond Carrying Value
Bond Face Value * PV$1(i,n)
+ Payment Amount * PVOA(i,n)
Bond Selling Price
When calculating the selling price, be sure to use the Market Rate for i.

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