Homework question help

label Business & Finance
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Bonds are trading for a price of $849.11. The bond currently has 12 years until maturity and has a yield to maturity of 9.12%. The bond pays annual coupons and the next coupon is due in 1 year. What is the coupon rate of the bond? (Round 1 decimal place)

Jul 3rd, 2015

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Jul 3rd, 2015

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Jul 3rd, 2015

c=i/p

coupon = interest / per value

 Annual interest = 9.12%*849.11=77.4 per year

77.4*12=928.8

coupon rate= 928.8/849.11=1.09% for twelve years


Jul 3rd, 2015

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