Beam Inc. bonds are trading today for $1472.45. The bond currently has 19 years until maturity and has a yield of maturity of 2.38%. The bond pays annual coupons and the next coupon is due in 1 year. What is the coupon rate of the bond?

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let the coupon rate be x,

PV = 1000*x (sum of 1/1.0238^i, i from 1 to 19) +1000/1.0238^19

=1000x*15.1426+639.61

=1472.45

15142.6x = 832.84

x= 5.50%

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