A three-year bond with an annual coupon of ten percent has a yield to maturity of ten percent when the bond trades at par.
Solution:
COUPON RATE 6.76%
YEAR TO MATURITY 19.00
NPER 38 (years to maturity x 2)
PMT 33.8 (face value x coupon rate)/2
FACE VALUE 1000
YIELD 7.13%
RATE = YIELD/2 = 3.57%
PRICE = PV = $961.82
A zero-coupon bond, also called an accrual bond, is a debt security that pays no interest but trades at a significant discount and earns a profit at maturity if the bond is redeemed at its par value. Then just do some simple math. Preferred stock par value = number of shares outstanding x par value per share. Therefore, the par value of a preferred stock is calculated by multiplying the number of shares outstanding by the par value per share.
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