Question

Shidao Enterprises has bonds on the market making annual payments, with 12 years to maturity, and...

Shidao Enterprises has bonds on the market making annual payments, with 12 years to maturity, and selling for $920. At this price, the bonds yield 11.0 percent. What must the coupon rate be on the bonds?

11.00%

19.54%

9.77%

10.62%

9.97%

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

We have the bond price formula:

Where,
C = Periodic coupon payment,
P = Par value of the bond, (assuming P = $1000)
r = Yield to maturity
n = Years to maturity

Therefore,

So we have periodic coupon payment = $97.68

Therefore,

OR

Therefore, the coupon rate is 9.77%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Gabriele Enterprises has bonds on the market making annual payments, with 6 years to maturity, a...
Gabriele Enterprises has bonds on the market making annual payments, with 6 years to maturity, a par value of $1,000, and selling for $920. At this price, the bonds yield 10 percent. What must the coupon rate be on the bonds?
Gabriele Enterprises has bonds on the market making annual payments, with 20 years to maturity, a...
Gabriele Enterprises has bonds on the market making annual payments, with 20 years to maturity, a par value of $1,000, and selling for $810. At this price, the bonds yield 8.1 percent. What must the coupon rate be on the bonds?
Ervin’s Enterprises has bonds on the market making annual payments, with 13 years to maturity, a...
Ervin’s Enterprises has bonds on the market making annual payments, with 13 years to maturity, a par value of $1,000, and selling for $880. At this price, the bonds yield 11 percent. What must the coupon rate be on the bonds?
Gabriele Enterprises has bonds on the market making annual payments, with 13 years to maturity, a...
Gabriele Enterprises has bonds on the market making annual payments, with 13 years to maturity, a par value of $1,000, and selling for $950. At this price, the bonds yield 10 percent. What must the coupon rate be on the bonds?
Page Enterprises has bonds on the market making annual payments, with seven years to maturity, and...
Page Enterprises has bonds on the market making annual payments, with seven years to maturity, and selling for $1120. At this price, the yield to maturity is 11%. What must the coupon rate %
goldstream enterprises has bonds on the market making annual payments with 9 years to maturity and...
goldstream enterprises has bonds on the market making annual payments with 9 years to maturity and selling for 948. at this price the bonds yield 5.9%, what must the coupon rate be on bonds?
Ervin’s Enterprises has bonds on the market making annual payments, with 13 years to maturity, a...
Ervin’s Enterprises has bonds on the market making annual payments, with 13 years to maturity, a par value of $1,000, and selling for $880. At this price, the bonds yield 10 percent. What must the coupon rate be on the bonds? Multiple Choice 10.0% 8.86% 8.31% 9.22% 7.78%
Gabriele Enterprises has bonds on the market making annual payments, with eight years to maturity, a...
Gabriele Enterprises has bonds on the market making annual payments, with eight years to maturity, a par value of $1,000, and selling for $952. At this price, the bonds yield 6.1 percent. What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Page Enterprises has bonds on the market making annual payments, with eight years to maturity, and...
Page Enterprises has bonds on the market making annual payments, with eight years to maturity, and selling for $1097.89. At this price, the bonds yield 2.6 percent. What must the coupon rate be on the bonds? (Enter your answer as a percentage, omit the "%" sign in your response, and enter your answer with two decimal places. For example, 1.214% should be entered as 1.21.)
Kiss the Sky Enterprises has bonds on the market making annual payments, with 17 years to...
Kiss the Sky Enterprises has bonds on the market making annual payments, with 17 years to maturity, and selling for $820. At this price, the bonds yield 9.8 percent. What must the coupon rate be on the bonds? Multiple Choice 7.68% 9.25% 9.80% 15.17% 7.58%
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT