A bond is currently trading at $825. It has 12 years to maturity. If you require a

Question:

A bond is currently trading at $825. It has 12 years to maturity. If you require a rate of return of 12 percent, what should be the bond’s rate if the bond pays semi-annual coupons?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...