Question

Bryceton, Inc. has bonds on the market with 12 years to maturity, a yield-to-maturity of 9.8 percent, and a current price of $1,157.70. The bonds make semiannual payments. What is the coupon rate?

Answer 1

  

_______________________________

_______________________________

Value of Bond =

Where r is the discounting rate of a compounding period i.e. 0.098 / 2 = 0.049

And n is the no of Compounding periods 12 years * 2 = 24

Coupon ?%

1157.70 =

1157.70 = Coupon * 13.9338724524 + 317.24024983

Coupon = 1157.70 - 317.24024983 / 13.9338724524

Coupon = 60.3177439036

Coupon Rate = 60.3177439036 * 2 / 1000 = 12.06%

NOTE: Do upvote the answer, if this was helpful.

NOTE: Please don't downvote directly. In case of query, I will solve it in comment section in no time.