Question

Chapter 6, Question #8

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. 1.11 points Last Price 94.293 Company (Ticker) Coupon Xenon, Inc. (XIC) 6.500 Kenny Corp. (KCC) 7.230 Williams Co. (WICO) ?? 8 01:42:18 Maturity Jan 15, 2034 Jan 15, 2031 Jan 15, 2037 Last Yield ?? 6.24 .49 EST $ Vol (000's) 57,373 48,952 4 3,813 ?? 96.845 6 Skipped eBook 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.) Print References Coupon rateſ

Answer 1

Price of Williams Co. Bond = (96.845/100)(2,000) = $1,936.90

Calculating Coupon Payment on BOnd,

Using TVM Calculation,

PMT = [PV = -1,936.90, FV = 2,000, N = 18, I = 0.0649]

PMT = $123.76

Coupon Rate = 123.76/2,000 = 6.188%