You find the following corporate bond quotes. To calculate the number of years u

Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2016. The bonds have a par value of $2,000 Last Yield 20 6.06 6.31 EST S Vol (000's) 57,364 48,943 43,804 Company (Ticker) ast Price 94.203 Xenon, Inc. (XIC) Kenny Corp. (KCC) Williams Co. (WICO) Coupon 5.600 7.140 Maturity Jan 15, 2022 Jan 15, 2019 Jan 15, 2025 96.755 What is the coupon rate for the Williams Co. bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate

Explanation / Answer

Using financial calculator BA II Plus - Input details:

#

I/Y = Rate =

6.31

FV = Face value

$2,000.00

N = Number of payments remaining =

9

PV = Present value = 2000 x 96.755%

-$1,935.10

CPT > PMT = Coupon payment =

$116.53

Convert coupon payment in % = 116.53/2000 = Coupon rate

5.83%

Using financial calculator BA II Plus - Input details:

#

I/Y = Rate =

6.31

FV = Face value

$2,000.00

N = Number of payments remaining =

9

PV = Present value = 2000 x 96.755%

-$1,935.10

CPT > PMT = Coupon payment =

$116.53

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