LO 2 5. Coupon Rates. Barnes Enterprises has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and a price of $963. At this price, the bonds yield 6.14 percent. What must the coupon rate be on the bonds? .
LO 2 5. Coupon Rates. Barnes Enterprises has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and a price of $963. At this price, the bonds yield 6.14 percent. What must the coupon rate be on the bonds? .
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 10P
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BOOK IS STATING THE CORRECT ANSWER IS 5.70 WHICH I DON'T UNDERSTAND WHEN TRYING TO SOLVE FOR PMT
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LO 2
5. Coupon Rates. Barnes Enterprises has bonds on the market making annual
payments, with 12 years to maturity, a par value of $1,000, and a price of
$963. At this price, the bonds yield 6.14 percent. What must the coupon rate
be on the bonds?
5 COUPON RATES
१५3 =
963=
584.91
-584.91 = 6.76X
-
1,000
(1.0614)?
+ X
+ X
1- (1.061437
.0614
[6.76]
J
37809 - X
6.76
x = 55.93 / 1,000 = .05593 x 100 = 5.59%
L
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Transcribed Image Text:O
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LO 2
5. Coupon Rates. Barnes Enterprises has bonds on the market making annual
payments, with 12 years to maturity, a par value of $1,000, and a price of
$963. At this price, the bonds yield 6.14 percent. What must the coupon rate
be on the bonds?
5 COUPON RATES
१५3 =
963=
584.91
-584.91 = 6.76X
-
1,000
(1.0614)?
+ X
+ X
1- (1.061437
.0614
[6.76]
J
37809 - X
6.76
x = 55.93 / 1,000 = .05593 x 100 = 5.59%
L
"
O
C
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