A firm has bonds on the market making semi-annual payments, with 16 years to maturity and selling for $1,075. At this price, the bonds yield 5.8 percent. What is the coupon rate?
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The present value is the price at which the bond is currently selling for. PV = C * (1 - (1 + r)^(-n)) / r + F / (1 + r)^n Where: PV = Present value of the bond C = Coupon payment r = Yield to maturity (expressed as a decimal) n = Number of periods (in this Show more…
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