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IG Enterprise bonds pay annual coupons, and with eightyears to maturity, are at par value...

IG Enterprise bonds pay annual coupons, and with eight years to maturity, are at par value of $1000 are selling at $948, yielding 5.1% bond yield. What would be coupon yield be on the yield?

Select one:

a. 4.29%

b. 4.3%

c. 4%

Expert Solution

Face/Par Value of bond = $1000

No of years to maturity(n) = 8 years

Yiled(YTM) = 5.1%

Calculating the Market price of Bond:-

Coupon Payment = $42.92

Coupon yield = Coupon Payment/Par Value = $42.92/$1000

Coupon yield = 4.29%

Option A

jeff jeffy answered 2 years ago

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