A bond sells for $941.15 and has a coupon rate of 7.80 percent. If the bond has
ID: 2643200 • Letter: A
Question
A bond sells for $941.15 and has a coupon rate of 7.80 percent. If the bond has 21 years until maturity, what is the yield to maturity of the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
A bond sells for $941.15 and has a coupon rate of 7.80 percent. If the bond has 21 years until maturity, what is the yield to maturity of the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Explanation / Answer
Current Price=$941.15
Face Value=$1,000
Coupon rate=7.80
Annual Coupon=1,000*7.80%=$78
Year to Maturity=21 Year
YTM=C+F-P/n / F+P/2
YTM= 78+ 1,000-941.15/21 /1,000+941.15/2
YTM=8.40
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.