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how to calculate the bond price with deferred coupon on BI calculator?
Eldora Ltd. recently issued deferred-coupon bonds for which no coupon payments will be paid in the first two years of the bond's life. Regular annual coupon payments at a rate of 9% will then be made until the bonds mature at the end of six years. The spot rates for various maturities are given in the following table.
Time to Maturity
1 year . 8.0%
2 years 7.5%
3 years 7.0%
4 years 6.5%
5 years 6.0%
6 years 5.5%
On the basis of these spot rates, the price of the bond today is closest to: