What is the coupon rate of a 8-year, $1000 bond with coupons paid semiannually and a price of $6900, if it has a yield to maturity of 8.5%.?
Face Value = $1,000
Current Price = $6,900
Annual YTM = 8.50%
Semiannual YTM = 8.50% / 2
Semiannual YTM = 4.25%
Time to Maturity = 8 years
Semiannual Period = 16
Let semiannual coupon be $C
$6,900 = $C * PVIFA(4.25%, 16) + $1,000 * PVIF(4.25%, 16)
$6,900 = $C * (1 - (1/1.0425)^16) / 0.0425 + $1,000 *
(1/1.0425)^16
$6,900 = $C * 11.440309 + $513.786847
$C * 11.440309 = $6,386.213153
$C = $558.22
Semiannual Coupon = $558.22
Annual Coupon = 2 * Semiannual Coupon
Annual Coupon = 2 * $558.22
Annual Coupon = $1,116.44
Coupon Rate = Annual Coupon / Face Value
Coupon Rate = $1,116.44 / $1,000
Coupon Rate = 1.1164 or 111.64%
What is the coupon rate of a 8-year, $1000 bond with coupons paid semiannually and a...
What is the coupon rate of a 8-year, $1000 bond with coupons paid semiannually and a price of 6900, if it has a yield to maturity of 8.5%. what is the coupon payment of a 4-year $1000 bond, 7.5%YTM, and with a 4% coupon rate and quarterly payments subject: finance
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