McConnell Corporation has bonds on the market with 15 years to maturity, a YTM of 7.0 percent, a par value of $1,000, and a current price of $1,216.50. The bonds make semiannual payments. What must the coupon rate be on these bonds?

McConnell Corporation has bonds on the market with 15 years to maturity, a YTM of 7.0 percent, a par value of $1,000, and a current price of $1,216.50. The bonds make semiannual payments. What must the coupon rate be on these bonds?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 1P

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McConnell Corporation has bonds on the market with 15 years to maturity, a YTM of 7.0
percent, a par value of $1,000, and a current price of $1,216.50. The bonds make
semiannual payments. What must the coupon rate be on these bonds?

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