Respuesta :
Answer:
7.08%
Explanation:
Face Value = $1,000
Current Price = 1000 x 97.66% = 976.6
Current yield = 7.25%
We can find the coupon rate by a simple formula
Coupon Rate = (Interest / Face value) x 100
We need to find interest first in order to find coupon rate
YTM = Interest / Current price
7.25% x 976.6 = Interest
70.7035 = Interest
Coupon Rate = (70.8035 / 1000) x 100
Coupon Rate = 7.08%
The coupon rate of the bond is 7.08%
Calculation of the coupon rate:
Since
Face Value = $1,000
Current Price = 1000 x 97.66% = 976.6
Current yield = 7.25%
So, the following formulal should be used
Coupon Rate = (Interest / Face value) x 100
But the interest should be determined.
YTM = Interest / Current price
7.25% x 976.6 = Interest
70.7035 = Interest
Now
Coupon Rate = (70.8035 / 1000) x 100
Coupon Rate = 7.08%
hence, the coupon rate is 7.08%.
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