30a . Bryceton, Inc. has bonds on the market with 13 years to maturity, a yield-

Question

30a. Bryceton, Inc. has bonds on the market with 13 years to maturity, a yield-to-maturity of 9.2 percent, and a current price of $802.30. The bonds make semiannual payments. What is the coupon rate? Please show supporting work.

0b. Soo Lee Imports issued 17-year bonds 2 years ago at a coupon rate of 10.3 percent. The bonds make semiannual payments. These bonds currently sell for 102 percent of par value. What is the yield-to-maturity? Please show supporting work.

30c. Dexter Mills issued 20-year bonds a year ago at a coupon rate of 10.2 percent. The bonds make semiannual payments. The yield-to-maturity on these bonds is 9.2 percent. What is the current bond price? Please show supporting work.

Explanation / Answer

Bond price = Present value of interest payment+Present value of face value

$802.30 = PVAF(4.6%,26)×Coupon payment+PVF(9.2%,13)×$1,000

$802.30 = 14.987345×Coupon payment+0.31058×$1,000

Semi-annual coupon payment = $32.81

Coupon rate will be 6.56%

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