7.70%
Step-1:Calculation of annual coupon payment | ||||||
Annual coupon payment | = | =pmt(rate,nper,pv,fv)*2 | ||||
= | $ 77.01 | |||||
Where, | ||||||
rate | 9.25%/2 | = | 0.04625 | |||
nper | 25*2 | = | 50 | |||
pv | = | $ -850 | ||||
fv | = | $ 1,000 | ||||
Step-2:Calculation of annual coupon rate | ||||||
Annual coupon rate | = | Annual coupon payment | / | Par Value | ||
= | $ 77.01 | / | $ 1,000 | |||
= | 7.70% | |||||
13. A company’s bonds have a $1,000 par value, and mature in 25 years. Their nominal...
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