Question

Caterpillar, Inc. currently has bonds outstanding with a par value of $1,000, a current price of $1,045, a YTM of 7.8 percent, and14 years to maturity. The bonds make semiannual payments. What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate %

          Caterpillar, Inc. currently has bonds outstanding with a par value of $1,000, a current price of $1,045, a YTM of 7.8 percent, and14 years to maturity. The bonds make semiannual payments.
What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Coupon rate %

Caterpillar, Inc. currently has bonds outstanding with a par value of 1,000, a current price of1,045, a YTM of 7.8 percent, and14 years to maturity. The bonds make semiannual payments.
What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Coupon rate %

Added by Erica D.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Lottie Adams

08/22/2022

Step 1

The present value of the bond can be calculated using the formula: 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 (YTM) rate n = Number of periods (in this case, number of Show more…

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help plz Caterpillar,Inc. currently has bonds outstanding with a par value of $1,000,a current price of $1,045, a YTM of 7.8 percent, and14 years to maturity.The bonds make semiannual payments What must the coupon rate be on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,e.g.,32.16.) Coupon rate