Thread: IRR error
View Single Post
  #1   Report Post  
Posted to microsoft.public.excel.misc
Brian Brian is offline
external usenet poster
 
Posts: 683
Default IRR error

Here is the question below I am working on in a Corporate Finance class.

(Default risk) You buy a very risky bond that promises a 9.5% coupon and
return of the $1,000 principal in 10 years. You pay only $500 for the bond.

a. You receive the coupon payments for three years and the bond defaults.
After liquidating the firm, the bondholders receive a distribution of $150
per bond at the end of 3.5 years. What is the realized return on your
investment?

Years Cashflow
0 500
0.5 0
1 95
1.5 0
2 95
2.5 0
3 95
3.5 150
When I do the IRR on the cash flow, I get the "NUM" error.. can somone help.