value: 1.00 points To calculate the number of years until maturity, assume that

Question

value: 1.00 points To calculate the number of years until maturity, assume that it is currently January 15, 2010 Last Price 94.183 EST $ Vol (000's) 57,362 48,941 43,802 Company Ticker) Last Yield Coupon 5.400 7.125 ?? Maturity Jan 15, 2020 Jan 15, 2017 Jan 15, 2026 Xenon, Inc. (XIC) Kenny Corp. (KCC) Williams Co. (WICO) 6.02 6.85 94.735 Required What is the coupon rate for the Williams Co. bond? (Do not include the percent sign (%). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Coupon rate 6.65 %

Explanation / Answer

Ans.:) coupon rate for the Williams Co. bond is as follows

Yield to maturity = { coupon payment (i.e iterest) + [ (Face Value-Current price)/ No of Years ] } / {(Face value+current prise)/2}.

6.85% = 100*Coupon Rate +[ (100-94.735)/16 ] / [(100+94.735 )/2]

6.85% * 97.3675 = 100 * coupon rate + (5.265/16)

6.669674 - 0.329063 = 100 * coupon rate

Coupon Rate = 6.340611 / 100 = 6.34%

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