MARJ Co. has a bonds outstanding with maturity value of P1,000. The effective interest is determined to be 5%, and interest is paid annually. The bonds mature in 5 years, and its current market value is P870.12. What is the approximate annual coupon interest rate?

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
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MARJ Co. has a bonds outstanding with maturity value of P1,000. The effective interest is determined to be 5%, and interest is paid annually. The bonds mature in 5 years, and its current market value is P870.12. What is the approximate annual coupon interest rate?
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