How do I calculate the Coupon rate

This topic has 2 replies, 3 voices, and was last updated 14 years ago by svasylenko.

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October 8, 2011 at 8:41 pm #50039
cowboyjunkie
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I have a question taken from Kaplan where i am given the redemption yield and no of yrs until maturity plus the selling price
I need to calculate the coupon rate!
Any ideas?
November 3, 2011 at 3:04 pm #88667
Anonymous
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Would you be able to type out the question please? At least the relevant parts.
Thanks.
November 6, 2011 at 7:37 pm #88668
svasylenko
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Hi,
Redemption yieldis yield required by bond holders (or market rate).
n – number of years.
MV – selling price.
Hence,
MV of bond =Coupon rate*Face value/(1+yield)^1+….(1+Coupon rate)*Face value/(1+yield)^n.
Sole equasion.By trying and error, for example.
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