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What is the coupon rate

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1. You decide to fund a new BCOMM common room in the new building at Haskayne. You will give the school $10,000 every year in perpetuity. You can't start making these payments until 5 years from today. If the interest rate is 7% per year, what is the present value of your gift? Explain your answer in detailed.

2. You purchased a five-year bond 18 months ago. The bond has a face value of $1000 and semi-annual coupons. You just received the third coupon payment earlier today and the price of the bond is $950 today. The yield to maturity is 7.96%, what is the coupon rate? Explain your answer in detailed.

Reference no: EM133120268

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