Question

You find the following corporate bond quotes. To calculate the number of years until maturity, assume that it is currently January 15, 2019 and the bonds have a par value of $2,000 EST $ Vol Company (Ticker) Xenon, Inc. (XIC) Kenny Corp. (KCC) Williams Co. (WICO) Last Last (000's) 57,375 48,954 43,815 Coupon 6.70 7.25 Maturity Jan 15, 2038 Jan 15, 2035 Jan 15, 2042 Price Yield 94.339 ?? 6.28 ?? ?? 94.865 7.10 What is the yield to maturity for the bond issued by Xenon, Inc.? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Yield to maturity

Answer 1

K = N

Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k]     +   Par value/(1 + YTM)^N

k=1

K =19

94.339 =∑ [(6.7*100/100)/(1 + YTM/100)^k]     +   100/(1 + YTM/100)^19

k=1

YTM% = 7.26