Respuesta :
Answer:
16.22%
Explanation:
To calculate the annual coupon rate, you can use the following formula:
Coupon Rate= (Annual coupon payment/Par value of the bond)* 100%
Annual coupon payment= $1158.91*14%= 162.2
Par value of the bond= $1000
Coupon Rate= (162.2/1000)*100%
Coupon Rate=0.1622*100%
Coupon Rate= 16.22%
The annual coupon rate on this bond is 16.22%
When an investor holds a particular type of bond then the expected income he anticipates receiving is called the annual coupon rate.
The annual coupon rate is calculated as the sum of coupon payments throughout the year divided by the par value.
The annual coupon rate of the bond is 16.22%.
The coupon rate can be estimated as:
The following formula is used:
[tex]\rm Coupon \; Rate (CR) = (\dfrac{Annual \;coupon \;payment}{Par\; value \;of\; the\; bond}) \times100\%[/tex]
Given,
[tex]\rm Annual \;coupon \;payment = \$1158.91 \times 14\%\\[/tex]
- Annual coupon payment = 162.2
- Par value of the bond= $1000
Putting values in equation:
[tex]\rm CR = (\dfrac{162.2}{1000}) \times 100\%\\\\CR =0.1622 \times 100\%\\\\CR = 16.22\%[/tex]
Therefore, 16.22% is the annual coupon rate.
To learn more about coupon rates follow the link:
https://brainly.com/question/6959763
