Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2019 and the bonds have a par value of $2,000. What is the coupon rate for the Williams Co. bond? You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2019 and the bonds have a par value of $2,000. Company (Ticker) Coupon Xenon, Inc. (XIC) 6.100 Kenny Corp. (KCC) 7.190 Williams Co. (WICO) ?? Maturity Jan 15, 2030 Jan 15, 2027 Jan 15, 2033 Last Price 94.253 ?? 96.805 Last Yield ?? 6.16 6.41 EST $ Vol (000's) 57,369 48,948 43,809 What is the coupon rate for the Williams Co. bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate %

Answer 1

To find the coupon rate, we need to put the following values in the financial calculator:

N = 2033-2019 = 14;

I/Y = 6.41;

PV = 96.805%*2,000 = -1936.10;

FV = 2000;

Press CPT, then PMT, which gives us 121.15

So, Coupon Payment = $121.15

Coupon Rate = Coupon Rate / Par Value = $121.15 / $2000 = 0.0606, or 6.06%