A company's bond has a 10% coupon rate and a $1000 face value. Interest is paid semianually,

Question:

A company's bond has a 10% coupon rate and a $1000 face value. Interest is paid semianually, and the bond has 20 years to maturity. If investors require a 12% yield, what is the bond's value?

What is the effective annual yield on the bond?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...