Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2019. The bonds have a par value of $2,000 and semiannual coupons.

Company Coupon Maturity LP LY EST
Xenon, Inc. (XIC)6.700 Jan 15, 2036 94.313 ?? 57,375
Kenny Corp. (KCC)7.250 Jan 15, 2033 ?? 6.28 48,954
Williams Co. (WICO)?? Jan 15, 2039 96.865 6.53 43,815
What is the coupon rate for the Williams Co. bond?

Answer 1

The coupon rate for the Williams Co. bond is 2,190.75%.

Step-by-step explanation:

The coupon rate for the Williams Co. bond can be calculated using the formula:

Coupon Rate = (Annual Coupon Payment / Par Value) * 100

From the given information, we know that the bond has a par value of $2,000. The LY (Last Year) column shows the annual coupon payment of $43,815. Plugging these values into the formula, we get:

Coupon Rate = ($43,815 / $2,000) * 100

Coupon Rate = 2,190.75%

Therefore, the coupon rate for the Williams Co. bond is 2,190.75%.