13. A company’s bonds have a $1,000 par value, and mature in 25 years. Their nominal...
Homework Answers
7.70%
| Step-1:Calculation of annual coupon payment | ||||||
| Annual coupon payment | = | =pmt(rate,nper,pv,fv)*2 | ||||
| = | $ 77.01 | |||||
| Where, | ||||||
| rate | 9.25%/2 | = | 0.04625 | |||
| nper | 25*2 | = | 50 | |||
| pv | = | $ -850 | ||||
| fv | = | $ 1,000 | ||||
| Step-2:Calculation of annual coupon rate | ||||||
| Annual coupon rate | = | Annual coupon payment | / | Par Value | ||
| = | $ 77.01 | / | $ 1,000 | |||
| = | 7.70% | |||||
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13. A company’s bonds have a $1,000 par value, and mature in
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