Part 1- (Find YTM with annual coupons). Suppose a company has a bond outstanding that sells for 95 percent of its $1,000
Posted: Tue Nov 16, 2021 8:32 am
Part 1- (Find YTM with annual coupons). Suppose a company
has a bond outstanding that sells for
95 percent of its $1,000 par value. The bond has a coupon rate of
5.4 percent paid annually and
matures in 16 years. What is the yield to maturity of this
bond?
Part 2- (Find coupon rate). Suppose a bond pays coupon annually. It
has seven years to maturity, a par
value of $1,000, and currently selling for $962. At this price, the
bond yield 6.6 percent. What
must the coupon rate be on the bonds? (Hint: find the coupon
payment first and then the rate by
dividing the coupon by the par value).
has a bond outstanding that sells for
95 percent of its $1,000 par value. The bond has a coupon rate of
5.4 percent paid annually and
matures in 16 years. What is the yield to maturity of this
bond?
Part 2- (Find coupon rate). Suppose a bond pays coupon annually. It
has seven years to maturity, a par
value of $1,000, and currently selling for $962. At this price, the
bond yield 6.6 percent. What
must the coupon rate be on the bonds? (Hint: find the coupon
payment first and then the rate by
dividing the coupon by the par value).