Accountancy, asked by somedragupta, 8 months ago

An investor is considering the purchase of the bond with the face value of 21000 with the
coupon rate of 12% and maturity period of 5 years. If the investor wants a yield of 14°9,
What is the maximum price he should be ready to pay for this bond'? If the bond is selling
for 2990 What would be his yield?

Answers

Answered by sargamlataak

Answer:

A bond's coupon rate denotes the amount of annual interest paid by the bond's issuer to the bondholder. Set when a bond is issued, coupon interest rates are determined as a percentage of the bond's par value, also known as the "face value." A $1,000 bond has a face value of $1,000. If its coupon rate is 1%, that means it pays $10 (1% of $1,000) a year.

Explanation:

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