A debenture with a face value of $100 is selling for $97.60. The coupon is 10% pa

Question:

A debenture with a face value of $100 is selling for $97.60. The coupon is 10% pa paid quarterly. What is the annual effective yield if the debenture has one and a half years to maturity (provide your answer as a percentage and accuracy to two decimal places)? Show your workings clearly and explain your logic. You must provide one manual calculation of IRR to demonstrate that you understand the process.

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... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...