Coupon rate on the bonds

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1. Your firm issued 15-year bonds one year ago at a coupon rate of 7%. The bonds make annual payments. If the YTM is 7.5%, what is the current bond price?

2. A firm has bonds on the market with 9 years to maturity, YTM of 7.1% and a current price of $915. The bonds make semiannual payments. What is the coupon rate on the bonds?

3. Your firm needs to raise $1 million and you want to issue 10-year bonds. The yield in the market is 6% and the coupon rate is 6.5%.

a. If you decide to issue zero coupon bonds which pay annually, what is the total repayment in 10 years?

b. If you decide to issue coupon bonds which pay annually, how many bonds must you issue?

Reference no: EM13742478

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