Problem 7-11

Tutak Industries issued a $600 face value bond a number of years ago that will mature in eight years. Similar bonds are yielding 8%, and the Tutak bond is currently selling for $1291.31. Assume bond coupons are paid semiannually. Compute the coupon rate on this bond. Do not round intermediate calculations. Round PVFA and PVF values in intermediate calculations to four decimal places. Round the answer to 2 decimal places. (In practice, we generally arent asked to find coupon rates.) (Hint: Substitute and solve for the coupon payment.)

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