Dyl Inc.'s bonds currently sell for $970 and have a par value of $1,000. They pay...

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Question

Answer 1

Answer #1

Answer: The correct answer is a i.e. 6.83%

Face Value = $1,000
Current Price = $970

Annual Coupon = $65

Time to Maturity = 15 years

Let annual YTM be i%

$970 = $65 * PVIFA(i%, 15) + $1,000 * PVIF(i%, 15)

Using financial calculator:
N = 15
PV = -970
PMT = 65
FV = 1000

I = 6.83%

Annual YTM = 6.83%

Answer 2

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