Annual coupon rate should company set on the bond

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Reference no: EM132008246

1. You would like to establish a trust fund that would pay annual payments to your heirs of $94 thousand a year forever. You expect the trust fund to earn an average return of 8.22 percent. How much do you need to deposit into this trust fund today to achieve your goal?

2. The detour sign company wants to issue a new bond issue needed expansion.

The bond will have a maturity of 15 years

the yield to maturity on the bond is 8.60%

the bond currently has a value of $1,025

the bond will pay interest on a semiannual basis

What annual coupon rate should the company set on the bond if it wants them to sell at par?

Reference no: EM132008246

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