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nikita enterprises has bonds on the market making annual payments, with eight years to maturity, a par value of $1,000, and selling for $952. at this price, the bonds yield 6.1 percent. 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.)

Respuesta :

The coupon rate on bonds is  53.2%.

The coupon rate is the annual income that a bondholder can expect to receive while holding the bond. It is calculated upon bond issuance by dividing the total yearly payments by the par value of the bond. When a bond is bought, its yield to maturity and coupon rate are equal.

Rate = 6.1%

8 years' worth of payment intervals.

PV = $952 in retail value

$1,000 face value is the FV.

When using Excel to locate the payment, we will obtain PMT = 53.25.

As a result, the payment will be 53.24, with the following coupon rate:

Face Value PMT = 53.22/1,000 = 53.2 percent

Bonds' coupon rate is 53.2%.

Learn more about coupon rates visit:

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