Homework Question Finance

label Business & Finance
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

Apple Inc. bonds are trading today for $937.50. The bond currently has 14 years until maturity and has a yield of maturity of 8.27%. The bond pays annual coupons and the next coupon is due in 1 year. What is the coupon rate of the bond?

Jul 7th, 2015

Thank you for the opportunity to help you with your question!

PV = 1000x*sum of (1/1.0827^i, i from 1 to 14) +1000/1.0827^14

=8116.5x +328.77

=937.50

x = 608.73/8116.5 

=7.5% 

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 7th, 2015

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