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Staind, Inc., has 11 percent coupon bonds on the market that have 12 years left to maturity. The bonds make semiannual payments. If the YTM on these bonds is 11 percent, what is the current bond price
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5 votes
5 votes
Staind, Inc., has 11 percent coupon bonds on the market that have 12 years left to maturity. The bonds make semiannual payments. If the YTM on these bonds is 11 percent, what is the current bond price

User Mamatv
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1 Answer

27 votes
27 votes

Answer: $1,000

Step-by-step explanation:

When the coupon rate of a bond is the same as its yield, the price of the bond will be the face value of the bond regardless of the period of compounding or the number of years left to maturity.

As the face value of most bonds is usually $1,000, we can surmise that the price of Staind bonds is $1,000 because its coupon rate of 11% is the same as its yield.

User Kender
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