Face Value = $1,000
Current Price = $974
Annual YTM = 4.03%
Time to Maturity = 15 years
Let Annual Coupon be $x
$974 = $x * PVIFA(4.03%, 15) + $1,000 * PVIF(4.03%, 15)
$974 = $x * (1 - (1/1.0403)^15) / 0.0403 + $1,000 / 1.0403^15
$974 = $x * 11.0951 + $552.8675
$421.1325 = $x * 11.0951
$x = $37.96
Annual Coupon = $37.96
Coupon Rate = Annual Coupon / Face Value
Coupon Rate = $37.96 / $1,000
Coupon Rate = 0.03796
Coupon Rate = 3.796% or 3.80%
. AB Builders has 15-year bonds outstanding with à face value of $1,000 and a market...
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