please tell me the steps to solve on financial calculator if possible. a six year semi annual coupon bond is selling for 991.38. the bond has a face value of 1,000 and a yield to matuirity of 9.19 percent. what is the coupon rate?
Face value= future value= $1,000
Present value= $991.38
Time= 6 years*2= 12 semi-annual periods
Yield to maturity= 9.19%/2= 4.5950% per semi-annual period
The following has to be entered in a financial calculator to calculate the coupon payments:
Press the CPT key and PMT key to calculate the coupon payment.
The value obtained is $44.9995 $45 for a semi-annual period.
The annual coupon payment is $45*2= $90.
Coupon rate= Coupon payment/ Face value
= $90/ $1,000
= 0.09 9%.
Therefore, the coupon rate is 9%.
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