3.7. Berks Corp bonds pay interest semiannually and they will mature in 10 years. Currently a $1000 bond sells for $800 and the bondholders require annual return of 9%. Calculate the coupon rate of these bonds.

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A: a)Calculation of Current Price of Bonds with 3 years maturity:Excel Spreadsheet:

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A: Given: Particulars Amount Current price (PV) $798.70 Years 10 Coupon interest rate 5%…

Q: coupon

A: Formula to calculate the coupon rate is: Coupon rate = Coupon payment/Face value

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A: The provided information are: Coupon rate = 7% Face value = $1000

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A: A financial instrument that does not affect the ownership of the common shareholders or management…

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A: a) YTM if price is 829 N = 5 PMT = 1000*9% = 90 FV =- 829 FV = 1000

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A: BondIt is the instrument of the indebtedness of an issuer of the bond to the holders of the bond

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A:

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A: The calculation of yield to maturity is shown below:

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A: YEARS 6 COUPON RATE 15% PRESENT VALUE $950 FACE VALUE $1,000 PMT (MONTHLY PAYMENT) $150

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A: Computation:

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A: Working note:

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A: Given: Particular  Value Par Value 1000 Time to maturity 14 Coupon rate 10%

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A: Face Value = 1000 Coupon = Coupon Rate * Face Value Coupon = 10% * 1000 Coupon = 100 YTM = 9%

Q: What is the bonds price

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Q: annual coupon rate

A: Introduction: Coupon rate can be defined as the interest which is paid to the bondholders & such…

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A: Bond price refers to the right price of a bond which is also called as the intrinsic value of the…

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A: It is the discounted value of future cash stream generated by a bond. It is the sum of present value…

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A: given information   coupon bond percentage = 5% time period = 10 years YTM = 5% face value = 1000