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Nikita Enterprises has bonds on the market making annual payments, with eleven years to maturity, a par value of $1,000, and selling for $970. At this price, the bonds yield 7 percent. What must the coupon rate be on the bonds?

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Parrain

Based on the selling price, the par value and the bond yield, the coupon rate must be 6.62%.

What is the coupon rate?

Use Excel to find the payment using the PMT function.

Rate = 7% = 0.07

Number of payment periods = 12 years

PV = $970 selling price

FV = $1,000 face vaue

Payment will be 66.22 which as a coupon rate is:

= 66.22 / 1,000 face value

= 6.62%

Find out more on coupon rates at https://brainly.com/question/26639808.

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