McConnell Corporation has bonds on the market with 19 years to maturity, a YTM of 6.4 percent, a par value of $1,000, and a current price of $1,266.50. The bonds make semiannual payments. What must the coupon rate be on these bonds?

McConnell Corporation has bonds on the market with 19 years to maturity, a YTM of 6.4 percent, a par value of $1,000, and a current price of $1,266.50. The bonds make semiannual payments. What must the coupon rate be on these 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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Question

McConnell Corporation has bonds on the market with 19 years to maturity, a YTM of 6.4 percent, a par value of $1,000,
and a current price of $1,266.50. The bonds make semiannual payments. What must the coupon rate be on these
bonds?

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