Calculating coupon rate in the given case
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Ashes Divide Corporation has bonds on the market with 13.5 years to maturity, a YTM of 9.4 percent, and a current price of $1,075.6. The bonds make semiannual payments. The coupon rate on these bonds must be ??? percent.
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The solution calculates the coupon rate in the given case.
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Face Value of bond=P=$1000
Number of coupon payments left=n=13.5*2=27
YTM=r=9.4% /2=4.7% semi annual
Coupon ...
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- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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