Rhiannon Corporation has bonds on the market with 14.5 years to maturity, a YTM

Question

Rhiannon Corporation has bonds on the market with 14.5 years to maturity, a YTM of 7.5 percent, and a current price of $1,061. The bonds make semiannual payments.   

PLEASE SHOW AND EXPLAIN ALL STEPS ALONG WITH FINANCIAL CALCULATOR STEPS IF POSSIBLE

What must be the coupon rate on these bonds?

Rhiannon Corporation has bonds on the market with 14.5 years to maturity, a YTM of 7.5 percent, and a current price of $1,061. The bonds make semiannual payments.   

PLEASE SHOW AND EXPLAIN ALL STEPS ALONG WITH FINANCIAL CALCULATOR STEPS IF POSSIBLE

Explanation / Answer

Semi annual bonds hence n-14.5*2=29
rate =0.075/2=0.0375
PV=-1061
FV=1000
Using calculator:
CPT PMT=$40.986 aprroximately semi annually
Annually it shall be $81.972
Hence rate of coupon = 8.1972% (81.972/1000)
or 8.2% approximately

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