Answered

Welcome to Westonci.ca, the ultimate question and answer platform. Get expert answers to your questions quickly and accurately. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Lei Corporation has bonds on the market with 12.5 years to maturity, a YTM of 7.2 percent, a par value of $1,000, and a current price of $1,030. The bonds make semiannual payments. What must the coupon rate be on these bonds

Sagot :

facundobuzzetti

Answer:

Coupon rate= 19.1%

Explanation:

Giving the following information:

Years to maturity= 12.5 years

YTM= 7.2 percent

Par value= $1,000

Current price= $1,030

To calculate the coupon, we need to use a financial calculator:

Function= CMPD

n= 12.5

I%= 7.2

PV= -1,030

PMT= solve = $191

FV= -1,000

Now, the coupon rate:

Coupon rate= 191/1,000

Coupon rate= 19.1%

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.