Ask Question
16 October, 15:01

4 - You are purchasing a 20-year, semi-annual bond with a current market price of $973.64. If the yield to maturity is 8.68 percent and the face value is $1,000, what must the coupon payment be on the bond?

+5
Answers (1)
  1. 16 October, 17:50
    0
    Annual coupon payment = $84

    Coupon payment in percentage = 8.4%

    Explanation:

    Coupon payment amount is calculated using the PMT function in excel as follows:

    =PMT (8.68%/2,20*2,-973.64,1000)

    =42

    Annual coupon payment = 42*2 = $84

    Coupon payment in percentage = 84/1000 = 8.4%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “4 - You are purchasing a 20-year, semi-annual bond with a current market price of $973.64. If the yield to maturity is 8.68 percent and the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers