contestada

Rhiannon Corporation has bonds on the market with 17.5 years to maturity, a YTM of 6.4 percent, a par value of $1,000, and a current price of $1,037. The bonds make semiannual payments. What must the coupon rate be on these bonds

Respuesta :

Answer:

6.75%

Explanation:

The calculation of the coupon rate is given below:

Given that

PV = $1,037

FV = $1,000

YTM = 6.4% ÷ 2 = 3.2%

NPER = 17.5 × 2 = 35

The formula should be

=PMT(RATE,NPER,-PV,FV,TYPE)

After applying the above formula, the pmt should be $33.77

Annual pmt is

= $33.77 × 2

= $67.55

Now the coupon rate is

= 67.55 ÷$1,000

= 6.75%

Otras preguntas