XYZ Corp has bonds on the market with 7.5 years to maturity, a YTM of 6 percent,
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Question:
XYZ Corp has bonds on the market with 7.5 years to maturity, a YTM of 6 percent, and a current price of $1,000. The face value is $1,000. The bonds make semiannual payments. What must be the dollar coupons (dollar amount, not percentage) paid every six-months on XYZ’s bonds?
Hint: A YTM of 6% for a semiannual bond is a reporting convenience. It implies the actual 6 month return is 3%.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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