What is their nominal coupon rate

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Reference no: EM131499959

Pandora Media plans to issue original issue discount (OID) bonds with a 20-year maturity, $1,000 par value, and initial yield to maturity of 8%. Since these bonds are Issued below par, the total yield will come from both annual coupon payments and appreciation. If the bonds are offered at a discounted price of $980, what is their nominal coupon rate? That is, at this price, what coupon rate will result in a yield to maturity of 896?

Reference no: EM131499959

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