Wheeler's has bonds on the market with 13 years to maturity, a YTM of 7.6 percent, and a current price of $901.98. The bonds make semiannual payments and have a face value of $1,000. What is the coupon rate?

The coupon rate is 6.40 percent.

Explanation:

From the data provided we have;

Years to maturity = 13 years

Yield to maturity = 7.6 percent

Current price = $901.98

Face value = $1000

Bond price = C * [ (1 - {1 / [1 + (.076 / 2) ] (13 * 2) }) / (.076 / 2) ] + $1,000 / [1 + (.076 / 2) ] (13 * 2)

C = $32.00

coupon rate = (C * 2) / face value

Coupon rate = ($32 * 2) / $1,000 =.0640

Coupon rate = 6.40 percent