Big Canyon Enterprises has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and a price of $1,030. At this price, the bonds yield 6.14 percent. What must the coupon rate be on the bonds? (
Added by Phyllis T.
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.. + \frac{C + FV}{(1 + r)^n}\] where: PV = Present Value of the bond ($1,030) C = Coupon payment r = Yield rate (6.14% or 0.0614) FV = Face value of the bond ($1,000) n = Number of years to maturity (12 years) Show more…
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