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How do I calculate the Coupon rate

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › How do I calculate the Coupon rate

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  • October 8, 2011 at 8:41 pm #50039
    cowboyjunkie
    Member
    • Topics: 4
    • Replies: 3
    • ☆

    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
    Inactive
    • Topics: 0
    • Replies: 3
    • ☆

    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
    Member
    • Topics: 2
    • Replies: 5
    • ☆

    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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