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Please answer the following: ABC Corp has bonds on the market with 7.5 years to maturity, a YTM of 8 percent, and a current price
Please answer the following:
ABC Corp has bonds on the market with 7.5 years to maturity, a YTM of 8 percent, and a current price of $970. The face value is $1,000. The bonds make semi-annual (every six months) payments. What must be the dollar coupon amount every sixmonths for an ABC bond? Hint: A YTM of 8% for a semiannual bond is a reporting convenience. It implies the actual 6 month return is 4%. You need to use the annuity formula to solve this one. YourStep by Step Solution
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