Bonds on the market making annual payments

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Reference no: EM131976254

1. Kiss the Sky Enterprises has bonds on the market making annual payments, with 10 years to maturity, and selling for $900. At this price, the bonds yield 9.8 percent. What must the coupon rate be on the bonds? (Note: first find the coupon payment, then the coupon rate. The face value of $1,000 x coupon rate = coupon payment).

2. Grohl Co. issued 9-year bonds a year ago at a coupon rate of 9 percent (APR). The bonds make semiannual payments. If the YTM on these bonds is 6 percent (APR), what is the current bond price?

Reference no: EM131976254

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