TravelEasy Inc. has issued 30-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 14% and the current yield to maturity is 8%, what is the firm's current price per bond?

 To calculate the current price per bond issued by TravelEasy Inc., we need to determine the present value of all future cash flows associated with the bond, which consists of the semiannual coupon payments and the face value that will be paid back at maturity.

1. First, we need to find the semiannual coupon payment. Since the coupon rate is 14% annually, for semiannual payments this rate is split in half: 

Semiannual coupon rate = 14% / 2 = 7%

2. Next, calculate the semiannual coupon payment in dollars: 

Semiannual coupon payment = (7% of $1,000)

 = 0.07 * $1,000 

= $70

3. The yield to maturity (YTM) should also be adjusted for semiannual periods:

 Semiannual YTM = 8% / 2 = 4% or 0.04 in decimal form

3. Each bond has a maturity of 30 years, but since payments are semiannual, there will be 60 payment periods: 

Number of periods (n) = 30 years * 2 = 60

4. Now we can calculate the present value of the semiannual coupon payments (an annuity), using the formula for the present value of an annuity: 

Present Value of coupon payments = C * [(1 - (1 + r)^-n) / r] Where C = Semiannual coupon payment, r = Semiannual YTM, n = Number of periods 

Present Value of coupon payments = $70 * [(1 - (1 + 0.04)^-60) / 0.04]

5. We also need to calculate the present value of the face value that will be received at the end of the 30th year (60th semiannual period): 

Present Value of face value = Face value / (1 + r)^n 

Present Value of face value = $1,000 / (1 + 0.04)^60

6. The bond's current price is the sum of the present value of the annuity (coupon payments) and the present value of the face value: 

Current price per bond = Present Value of coupon payments + Present Value of face value

7. To compute the present values, you would typically use a financial calculator or spreadsheet software as the calculations involve lengthy decimals. However, for the sake of clarity, these calculations can be approximated:

Present Value of coupon payments = $70 * 24.4655 = $1,712.585 (using annuity present value factor) 

Present Value of face value = $1,000 / 6.0025 

= $166.61 (using present value factor)

8. Finally, add the present values of the coupon and the face value to find the current bond price: 

Current price per bond = $1,712.585 + $166.61 = $1,879.195

So, the firm’s current price per bond would be approximately $1,879.20.