Your firm offers a 20-year,semiannual coupon bond with a yield to maturity of 8.35 percent,a face value of $1,000,and a market price of $1,054.What is the coupon rate?

Name: Your firm offers a 20-year,semiannual coupon bond with a yield to maturity of 8.35 percent,a face value of $1,000,and a market price of $1,054.What is the coupon rate?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

$1,054 = C × ({1 - 1/[1 + (.0835/2)]^{20 × 2}}/(.0835/2))+ {$1,000/[1 + (.0835/2)]^{20 × 2}}C = $44.55 Coupon rate = ($44.55 × 2)/$1,000 = .0891,or 8.91%

Your Firm Offers a 20-Year,semiannual Coupon Bond with a Yield