Kiss the Sky Enterprises has bonds on the market making annual payments, with 10 years to...

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Answer 1

Answer #1

Price of a bond is mathematically represented as: 1 1-- (1 + i) PEC. - +- м. (1 + i) where P is price of bond, with periodi

Assume M = $1000, n = 10, i = 9.3%, P = $790

1- 790 = C* (1+0.093)10 - 0.093 + 1000 (1 + 0.093) 10

790 = C * 6.333775 + 410.959

559.0411 = C * 6.333775

C = 88.2635

Coupon Rate = ANnual coupon/Par value = $88.2635/$1000 = 0.0882 = 8.82%

Answer 2

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