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miss Akunina [59]
3 years ago
12

Gabriele Enterprises has bonds on the market making annual payments, with twelve years to maturity, a par value of $1,000, and s

elling for $960. At this price, the bonds yield 6.5 percent. What must the coupon rate be on the bonds
Business
1 answer:
wariber [46]3 years ago
3 0

Answer: 6.01%

Explanation:

To solve this question, we.will use the financial calculator. Based on the information given, then we will have:

FV = Future Value = $1,000.00

PV = Present Value = -$960.00

Bonds yield = 6.50

N = Number of years = 12

Therefore, CPT > PMT = Payment will be = $60.0973

Then, Coupon rate will be:

= Payment / Face Value

= 60.0973 / 1000

= 6.01%

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