Question

Based on the following info for a bond- what is the bond's coupon rate?

Years to Maturity- 25

Par Value- 1,000

Interest Rate 0.1

Current Price 1,200

Answer 1

Given information

1) par value or face value = 1,000

2) current market price or subscription price = 1,200

3) interest rate = 0.1

coupon rate = coupon amount×100/par value

this problem had 2 alternative methods.

both methods are correct.