Gabriele Enterprises has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and selling for $820. At this price, the bonds yield 11 percent. What must the coupon rate be on the bonds?
Gabriele Enterprises has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and selling for $820. At this price, the bonds yield 11 percent. What must the coupon rate be on the bonds?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Gabriele Enterprises has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and selling for $820. At this price, the bonds yield 11 percent. What must the coupon rate be on the bonds? |
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