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View Full Version : Coupon rate


jvalence
Jul 15, 2008, 12:14 PM
If you have bonds on the market with 12.5 years to maturity, a YTM of 10.8 percent, and a current price of $715.54 and the bonds make semiannual payments. What is the coupon rate?

wingrun
Jul 17, 2008, 01:23 AM
using a financial calculator input these information:

N=25 (12.5 years, semiannual coupons)
I/YR=5.40 (10.8/2 because coupon is semiannual)
PV=715.54
FV=1000

this gives approx $33 of coupon. Verify the calculation as I might be wrong.